Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TRADE AND INDUSTRY

Stock Exchange (Advertising)

Dr. Gilbert: asked the Secretary of State for Trade and Industry what discussions he has held with the Stock Exchange Council with respect to the proposals that its members be permitted to solicit funds from the general public by advertising, and the necessary safeguards that will need to be instituted.

The Secretary of State for Trade and Industry (Mr. John Davies): I have no statutory responsibility for the rules of the Stock Exchange, London.

Dr. Gilbert: Will the right hon. Gentleman at least give the House an assurance

that discussions will be held with the Stock Exchange Council before member firms are able to solicit funds from the public—however unsophisticated it may be—for speculative investments? Will he at least ensure that three safeguards are met—supervision of advertising, supervision of brokers' solvency margins and publication of brokers' accounts?

Mr. Davies: I take note of those points. I am engaged in informal discussions with the Stock Exchange at the moment, but within statutory allowances I cannot take any control in these fields.

Hallmarking

Mrs. Knight: asked the Secretary of State for Trade and Industry when he intends to implement the recommendations of the 1959 Board of Trade Departmental Committee on Hallmarking.

The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): We are at present awaiting comments from interested parties on a consultative document setting out proposals for a new hallmarking law. I cannot, however, say when it will be possible to introduce legislation.

Mrs. Knight: Does not the Minister think that twelve years is a very long time to wait for comments on a report of this kind? Is he aware of the great importance to the silversmithing and goldsmithing trades that compulsory hallmarking should continue, and also the importance


to the buying public? Will it go on, or will it not? Can the Minister at least reaffirm the assurance given in the House on 28th January, 1970, that any reform of the law will be based on compulsory hallmarking of gold, silver and platinum ware?

Mr. Ridley: The consultative document was issued only a few months ago. That document definitely suggests that there will be compulsory hallmarking. But it is important to get the details right, and that is what we are trying to do.

Mrs. Doris Fisher: I have had considerable correspondence with the Department. One gets a little frustrated by letters saying that consultations are still going on. As far back as last June, July and September, and again in February of this year, it was said that consultations were still going on. When one gets in touch with the Assay Office one finds that it has made its returns. Is the delay in the Department?

Mr. Ridley: I cannot accept responsibility for the 12 years referred to by the hon. Lady. I can only tell her that the document that we issued was issued only a few months ago. She will probably agree that it is important that the trade should agree the details of the new law. As far as I can see, there has been no undue delay.

Nuclear Power Stations

Mr. Eadie: asked the Secretary of State for Trade and Industry what discussions he has had about changes in the types of and construction of future nuclear power stations; and if he will make a statement.

Mr. Ridley: Together with the generating boards, the Atomic Energy Authority, and the nuclear design and construction companies, we are examining the choice of thermal nuclear reactors for further development in this country.

Mr. Eadie: Does not the hon. Member agree that since there are difficulties about the type of nuclear power station that we should have in the future and since a good deal of cost in involved, there is a case for Parliament's being informed on this important issue? It is a very important matter for the future of our indigenous resources.

Mr. Ridley: I shall be delighted to give the hon. Member any details that

he requires. At the moment we are considering whether there should be another generation of nuclear reactor before the fast reactors are introduced in the next decade, but no decision has been taken whether there should be, or which one it should be. I cannot inform the hon. Member of things that have not yet been decided.

Mr. Hall-Davis: Can my hon. Friend say which nuclear technology it is proposed to use for the second phase of the Heysham station?

Mr. Ridley: That is a matter for the C.E.G.B. It has not put forward definite proposals for using the second part of the site at Heysham. I cannot say what the proposals will be until they are received.

Mr. Benn: Following what my hon. Friend said about the importance of the decision when it comes, can the hon. Gentleman give the House more information about the attitude adopted towards the steam generating heavy water reactor against other systems—a question which is of importance not only for the C.E.G.B. and the Scottish boards but for our export orders in general?

Mr. Ridley: I cannot tell the House that yet, because the steam generating heavy water reactor is in competition with two or three other types of reactor for a final decision on which to develop fully. Until that decision has been taken, I cannot say what it will be.

Mrs. Kellett: As the costs of nuclear power stations tend to be higher than has been expected, is there not a strong case, instead of scattering the stations throughout the country, for quantifying the cost advantage of going straight from phase 1 to phase 2 at Heysham, to obtain the full advantage of forward plans and the presence of an experienced construction team?

Mr. Ridley: My hon. Friend has a Question on the paper about this. The amount of generating capacity which is needed at any one time is a matter entirely for the generating boards, and it is they who wish at the present time not to proceed with the second site at Heysham. Therefore, it is for them to decide, because they are responsible for settling the country's needs for electricity in due course.

Mrs. Kellett: asked the Secretary of State for Trade and Industry what estimate he has made of the cost benefit which would be secured by his authorising the construction of the second phase of the Heysham nuclear power station as an integrated project with the current phase as compared with authorising a similar project in another location.

Mr. Hall-Davis: asked the Secretary of State for Trade and Industry for which sites the Central Electricity Generating Board holds planning permission for a nuclear power station where he has not authorised construction; for which sites in respect of which he has authorised construction, work has begun or tenders been invited; and for which sites for which he has authorised construction tenders have not yet been invited.

Mr. Ridley: Subject to approval of its general programme of capital expenditure, it is the responsibility of the C.E.G.B. to decide whether to develop the whole or part of the capacity for which it has consent to use a particular site. The only nuclear site for which consent has been given where the C.E.G.B. is at present constructing the first stage of a two-stage station is Heysham. The only other site with consent for a nuclear station is Sizewell B, and the C.E.G.B. has deferred until next year its decision about placing the main plant contracts for this station.

Mrs. Kellett: I thank my hon. Friend for that answer, but could he give an estimate of the benefits of running the two schemes together? If it is not possible for him to give an estimate at present of the possibilities of integrating the two, the second phase and the first, will he not accept that a contractor with plant on the site would be able to cut to the bone the cost of a further stage, and, in addition, will he accept that, because of the high level of unemployment in the Lancaster area, which has been building up since 1964, it is highly desirable to press the Central Electricity Generating Board to proceed on this site?

Mr. Ridley: I am sure that my hon. Friend will be able to press the C.E.G.B. better than I can. Much of what she seeks she should seek from the board. There is no point in building power stations unless there is a need for the

electricity when the stations are completed. That is the doubt in the board's mind.

Mr. Hall-Davis: While obviously we do not want to exceed the demand for power, does my hon. Friend agree that on both environmental grounds and for the maintenance of safety precautions it is preferable to make full use of a site which the Nuclear Safety Committee has approved and for which planning permission has been given before starting new construction on a further site elsewhere?

Mr. Ridley: While the Government have given approval to two stations on the site, they have little further influence over the matter. The House will agree that we should give the C.E.G.B. managerial freedom to decide which stations to develop there within consents given by the various Departments concerned.

V. &amp; G. Insurance Co. Ltd.

Mr. Greville Janner: asked the Secretary of State for Trade and Industry whether he will now make representations to the British Insurance Association concerning its refusal to accept responsibility for debts of the Vehicle & General Insurance Group, other than those arising out of passenger liability.

Mr. John Davies: I would refer the hon. Member to the answer I gave to my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) on 10th March. My discussions continue.—[Vol. 813, c. 138–9.]

Mr. Janner: Is the right hon. Gentleman aware of the widespread hardship caused by the collapse of Vehicle & General and the equally widespread feeling that, the British Insurance Association having clothed V. & G. with its apparent stability, something should be done about this very soon?

Mr. Davies: I am very conscious of the widespread concern about this. I am pressing forward with discussions with the B.I.A. and I shall certainly report on this matter at the earliest opportunity.

Mr. Tom Boardman: Will my right hon. Friend agree that although there would not appear to be any legal liability


on the part of B.I.A., the way in which that organisation represented the creditworthiness of its members may, if not honoured, bring considerable damage to the insurance world?

Mr. Davies: Yes, I am aware of that, and I think B.I.A. is, too.

Newton Aycliffe

Mr. David Reed: asked the Secretary of State for Trade and Industry if he is satisfied with the rate at which new industry is being attracted to Newton Aycliffe; and if he will make a statement.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): Yes, Sir. Employment on the estate has almost doubled during the past 10 years. We are continuing to bring the facilities available at Aycliffe to the notice of firms seeking additional factory space.

Mr. Reed: Is the hon. Gentleman aware that employment on the estate has been static for almost two years? As the entire social and amenity development of Newton Aycliffe depends on future progress on the industrial estate, will not the hon. Gentleman agree that further stimulus is needed, since Newton Aycliffe is the only Northern Region new town which has not special development area status?

Mr. Grant: As to the unemployment, I should point out that the unemployment figures are exactly in line with the Great Britain average. On the question about the new town corporation, I shall be glad to consider, if the hon. Gentleman likes to get in touch with me, any possibilities in this respect.

International Flights (Carriage of Duty-Free Spirits)

Mr. Onslow: asked the Secretary of State for Trade and Industry what action he is taking to reduce the need for the carriage of duty-free spirits on board aircraft on international flights to and from airports in the United Kingdom.

Mr. Anthony Grant: None, Sir, but if my hon. Friend will let me have details of the particular point he has in mind I will look into it.

Mr. Onslow: While I am grateful to my hon. Friend for that reply, may I ask whether, before we meet to discuss this, he will represent to Her Majesty's Government's Customs that it is undesirable from the safety and workload point of view that aircraft should become flying off-licences? Since I am told reliably that it is possible for a jumbo jet to take off for New York carrying 1,800 bottles of whisky in the cabin, would it not be more desirable if they had duty-free vouchers instead?

Mr. Grant: I understand that this practice is not popular with the corporations and other operators, and I will certainly, as I undertook, discuss with my hon. Friend and with operators ways in which we can get round this difficulty. But I should like to correct the view that this is a hazard to safety. Our Directorate of Flight Safety experience has not revealed any hazards from a safety point of view.

European Free Trade Area

Mr. Marten: asked the Secretary of State for Trade and Industry if he will make a statement on the next Ministerial meeting of the European Free Trade Association.

Mr. John Davies: I would refer the hon. Member to the reply that I gave to my hon. Friend the Member for St. Marylebone (Mr. Kenneth Baker) on 10th November. My right hon. Friend will, however, be attending a further E.F.T.A. ministerial meeting later this week.—[Vol. 806, c. 116.]

Mr. Marten: In view of General de Gaulle's disclosures in the Soames affair, and as the Prime Minister is about to visit General de Gaulle's successor, would not this meeting of E.F.T.A. be an appropriate moment to widen discussions and to talk about a conference of E.F.T.A. and E.E.C. on a wider free trade area?

Mr. Davies: The principal item at this forthcoming meeting of E.F.T.A., as on the last occasion, will be the whole of the negotiations going on between individual countries and the Community. This matter will certainly be under very close discussion. However, I think it is difficult to widen it in the way that my hon. Friend suggests, pending a clearer decision on the negotiations.

Mr. Eadie: Could the right hon. Gentleman give an assurance that he is not treating this proposed meeting lightly, on the assumption that we are going into the Common Market? The right hon. Gentleman must agree, surely, that there is overwhelming opposition in this country to going into the Common Market. Therefore, to treat such a matter lightly would be fatal to the interests of this country.

Mr. Davies: Let me assure the hon. Gentleman that no Ministerial meeting of E.F.T.A. is treated lightly. In particular, this one, which will be the first held at Reykjavik, will be treated with due gravity by my right hon. Friend.

Mr. John Hall: Would my right hon. Friend not agree that it is incorrect to say that there is overwhelming opposition in this country to entry into the Common Market?

Mr. Davies: Yes, that is certainly my view.

RB211

Mr. Walter Johnson: asked the Secretary of State for Trade and Industry if he is now in a position to make a statement on the negotiations with Lockheed over the Rolls-Royce RB211 engine.

Mr. Sheldon: asked the Secretary of State for Trade and Industry if he will make a further statement on the RB211 contract.

The Minister for Aerospace (Mr. Frederick Corfield): With permission, I will make a statement after Question Time.

Mr. Bruce-Gardyne: asked the Secretary of State for Trade and Industry whether, following recent discussions with the Lockheed Corporation, it remains his assessment that the RB211 engine will be to a large extent behind engines of equivalent power and performance; and if he will make a statement.

Mr. Corfield: Assuming that the RB211 goes ahead, which I hope will be the case, it is nevertheless bound to come into service later than its competitors. I have, however, no doubt that it is potentially a very good engine indeed.

Mr. Bruce-Gardyne: I am grateful to my right hon. Friend for that reply, but will he bear in mind that as recently as 8th February he produced in the House a pretty powerful condemnation of the commercial case for the engine, in the light of which taxpayers will need a very clear assurance that this is the most sensible form of public works programme, if we are to go ahead with it, for the employment of the 40,000 people involved?

Mr. Corfield: A large number of considerations come into the question. As I have said earlier, and have repeated often enough, I believe the RB211 to be a very good engine. There is no doubt, however, that market potential in the aerospace world is particularly difficult to assess at present.

Mr. Walter Johnson: Does the right hon. Gentleman agree that it is pretty disgraceful when an hon. Member attacks a product of British industry like the RB211 engine as the hon. Member for South Angus (Mr. Bruce-Gardyne) has done? Does the right hon. Gentleman agree that that must make the negotiations with Lockheed even more difficult at a very touchy time?

Mr. Corfield: I do not think that that question has any bearing on the negotiations.

Concorde

Mr. Barnett: asked the Secretary of State for Trade and Industry if he will make a statement on Concorde.

Mr. John Davies: My right hon. Friend the Minister for Aerospace and I met M. Chamant on 22nd April. We were not able to make the thorough review we had originally intended because not all the information was available. We were, however, encouraged by the satisfactory nature of the flight test result to date.
We accordingly decided to authorise the start of manufacture of four more production aircraft, bringing the total number of production aircraft under construction to 10, and the ordering of long-dated materials for a further six aircraft.
The latest estimate of development costs at December, 1970 prices is £885 million. Further details will be circulated in the OFFICIAL REPORT.
We shall, of course, continue to keep a close watch on the project, and I will be meeting M. Chamant later in the year to examine progress.

Mr. Barnett: In view of the further massive escalation in costs, would the right hon. Gentleman confirm that cancellation at this stage could very well mean, including the further production costs authorised, costs exceeding £1,000 million jointly between ourselves and the French? In view of the Government's declaration about a more open style of government, would not the right hon. Gentleman consider giving to the House costs of cancellation compared with costs of continuing the project and the likely price obtainable in the narrow range of the likely number of sales? If the right hon. Gentleman does not give those figures, the House must assume that there will be even further escalation.

Mr. Davies: These discussions with the French try to cover forecasts the whole time. Like the hon. Gentleman, I am concerned about the rising costs of Concorde, but the truth is that at this stage it would indeed be very unwise to do other than proceed with this project, which we are doing.

Mr. Tebbit: Would not my right hon. Friend agree that for the second or third time running he would be well advised to tell some of the ignorant critics that most of the information for which they ask is published, and has been published particularly in the last three weeks, in Flight magazine, and that if they read it and assimilated it they would not ask such stupid questions?

Mr. Davies: I will not associate myself with every one of those expressions, but a lot of information is available.

Mr. Benn: I hope the right hon. Gentleman will appreciate that the House is entitled to hear authoritative figures and not to rely entirely on what it reads in magazines, which are not always accurate.
Will the right hon. Gentleman tell us two things? First, what has been the increase in the estimate in current prices, or December, 1970, prices, since the last statement was made? Second, could the right hon. Gentleman assure the House that no decision is taken by the Govern-

ment as between Concorde and the RB211 about which we are to have a statement later, and that each will be considered on its merits?

Mr. Davies: It was with a view to giving the House authoritative figures that I said what I did. At December, 1970, values, the increase is £60 million over the last estimate, which was £825 million, making the figure £885 million now, as I said. I think that that was the question which the right hon. Gentleman wished to have answered.
As regards his second point about any decision trying to play off the RB211 against the Concorde in one sense or other, there is absolutely no question of that being done.

Following is the information:


CONCORDE—STATEMENT ON DEVELOPMENT COSTS FOR OFFICIAL REPORT


The latest basic estimate of £885 million is divided as follows as between actual past expenditure and estimated future expenditure:—



British Government
French Government
Both Governments



£m.
£m.
£m.


Actual costs from 29th November, 1962 to 30th April, 1971 at the rates prevailing when the costs were incurred
280
245
525


Estimated costs from 30th April, 1971 to completion of the programme at December, 1970 prices and an exchange rate of £1= 13·33 FF.
160
200
360



440
445
885

The difference between the latest estimate of £885 million at December, 1970 prices and the former estimate of £825 million at June, 1970 prices is made up as follows:—



£m.


Former estimate at June, 1970 prices
825


Pay and price increases since June, 1970
15


Later date for obtaining Certificate of Airworthiness
15


Additional expenditure on the propulsion system
10


Other adjustments to the programme
20


Present estimate
885

Trade Descriptions (Nattrass v. Tesco Supermarkets)

Mr. Fletcher-Cooke: asked the Secretary of State for Trade and Industry


what action he proposes in the light of the decision of the House of Lords in Nattrassv.Tesco Supermarkets in view of its effect on the protection afforded by the Trade Descriptions Act.

Mr. Ridley: None, Sir. In my view, the protection afforded by the Act has not been significantly affected by this decision.

Mr. Fletcher-Cooke: Does not my hon. Friend realise that at the time of the passage of the Bill no one envisaged for a moment that it would be possible for a large concern like this to escape simply by blaming one of its managers for the defect? Will he look again at the possibility of amending legislation?

Mr. Ridley: The Act expressly provides that, where the commission by any person of an offence is due to the act or default of another person, the first person is to be acquitted if he also satisfies the court that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control.
This was recognised in the debates in the other place, and I ask my hon. and learned Friend to look at HANSARD for 22nd January, 1968. Perhaps the moral is that prosecutions should be directed against the person who is guilty and not at anyone handy.

Dr. Gilbert: Is not one of the problems in a case like this the question where the burden of proof lies, and does not the hon. Gentleman realise that there is grave concern in the public mind about this, that people do not agree with his view, and that they feel that their safeguards have been eroded?

Mr. Ridley: It is a perfectly natural rule of justice that people should not be subject to criminal charges unless one has some reason for believing that they have committed an offence. It is not enough, therefore, just to prosecute a company without making sure who it is within the company who has been responsible for committing the offence.

Mr. J. T. Price: Does the hon. Gentleman realise where his argument takes him in logic if he abandons the principle of vicarious liability for offences such as this? If we apply his principle to the

Factories Act and other social legislation, for example, and say that the target for a prosecution when an offence is committed shall be the man actually at the point of the offence, the main culprits in such a situation may escape altogether. Does not the hon. Gentleman realise that there is a serious constitutional issue here which, in my opinion, he seems to be taking far too lightly?

Mr. Ridley: No, Sir. It has always been true that, if the person accused of the commission of an offence can prove that it was clue to the act or default of another and that he has taken all reasonable precautions to make sure that that other person had proper instructions, he should be acquitted. That seems to me to be a fundamental principle of law which the hon. Gentleman would do wrong to question.

Heathrow Airport (Noise)

Mr. Worsley: asked the Secretary of State for Trade and Industry whether he will arrange for the two main runways at London Airport (Heathrow) to be used on alternate dates for take-off and landing, and for this procedure to be publicised in order that the public may have some relief from noise.

Mr. Anthony Grant: Whenever possible, landings are already equalised between the two main runways. I shall consider how far landings might be alternated between the runways, though any such arrangement would be liable to frequent interruption by unpredictable contingencies.

Mr. Worsley: I thank my hon. Friend for going as far as he has, but may I press him further on this matter, since it would be of great help to people in London if they could know when there would be some relief from this intolerable noise?

Mr. Grant: I appreciate that, and it is one of the reasons why I said that we shall consider the matter further. I should point out that it would make little difference at distances greater than about seven miles from the airport.

Mr. Hugh Jenkins: I have referred to the Parliamentary Commissioner a case suggesting that the hon. Gentleman's Department is not doing all it could in this


matter. If the Parliamentary Commissioner makes recommendations to his Departments that it should alter its procedures so as to give some relief from noise, will the hon. Gentleman take that very seriously?

Mr. Grant: We had better wait to see what the Parliamentary Commissioner says.

European Economic Community

Mr. Redmond: asked the Secretary of State for Trade and Industry if, in the event of Great Britain joining the European Economic Community, British industry will have the opportunity to discuss with parallel organisations in the Community the social problems of industrial development within the European Community.

Mr. Anthony Grant: Any organisation representing British industry is free now to discuss these matters with its opposite number in Europe.

Mr. Redmond: I thank my hon. Friend for that answer, but is he aware of the considerable disquiet in the regions, and certainly in Lancashire, because it is felt that the main benefits of membership of the Common Market will go to the "golden triangle" of London-Paris-Bonn and the regions will suffer neglect as a result? Could my hon. Friend give the country, and especially the regions, some assurance in this respect and say that organisations such as the C.B.I., the industrial development associations and so on will be able to consult with a view to improving matters in some of the older areas?

Mr. Grant: The Community countries are well aware of these matters and are particularly conscious of regional problems. There is nothing to stop regional policy. Both the C.B.I. and the T.U.C. have close contacts with their opposite numbers in Europe, and these will, no doubt, continue.

Tariffs

Mr. Blaker: asked the Secretary of State for Trade and Industry what evidence he has to show that the tariff advantages British industry enjoys in the Commonwealth are being eroded independently of any changes that might be attributed to our joining the European Economic Community.

Mr. John Davies: Reductions in tariff preferences resulting from multilateral tariff negotiations, increases in protective rates and other changes in national tariffs.

Mr. Blaker: Is it not true that, as Commonwealth countries have established their own manufacturing industries, they have progressively tended to protect them and that, because of the advantages which we have enjoyed in those countries in the past, this is a process which has been and is likely to be particularly prejudicial to ourselves?

Mr. Davies: There are certain Commonwealth countries which have sought to protect infant industries in that way, but there may still be margins of preference in our favour. The same has happened in South Africa, which is not a member of the Commonwealth but is a member of the sterling area.

Mr. Biggs-Davison: Has not the mutually beneficial adjustment of the Ottowa preferences, which are long out of date, been frustrated by the working of the G.A.T.T. ban on new and increased preferences, and, with all the confusion in the Community and so on, is not the time coming for all these matters to be considered afresh?

Mr. Davies: Yes, Sir, I have no doubt that it will be necessary to think carefully once again in relation to both these items and certain others when we see more clearly the progress of the negotiations in Brussels.

Unemployment (Regional Policies)

Mr. William Hamilton: asked the Secretary of State for Trade and Industry what recent estimate has been made of the effects of the new regional policies on the levels of unemployment; and how soon he expects the full results of those policies to be effective.

Mr. Anthony Grant: No system of regional incentives could yield measure-able results in the space of six months. Progress will depend on the co-operation of all in creating conditions for sound national economic growth.

Mr. Hamilton: That answer means absolutely nothing. Does the hon. Gentleman regard the present figures as appalling, and, if he does, what adjective will he apply to the figures for the coming


winter? Second, when will the Government accept complete responsibility for the appalling mess into which we have now got ourselves?

Mr. Grant: If the hon. Gentleman wants me to use an adjective, it would be very similar to that which I used about the high unemployment under his Administration. The present Government will take responsibility for what happens next winter. What they do not take responsibility for is what happened during the six years of the Labour Government.

Mr. Bruce-Gardyne: Will my hon. Friend confirm that the sole result of the so-called regional policies pursued by the Labour Government in Scotland was that, notwithstanding hundreds of millions of pounds poured in, more than 80,000 jobs wore lost?

Mr. Grant: I entirely agree.

Mr. Varley: Part of the Government's case is that they have had a thorough-going review of regional policies. If they want to maintain this pretence, why are they being so timid in not publishing a White Paper setting out all the facts, the nature of the review, the cost-effectiveness of investment grants, and so on? The House is entitled to this information.

Mr. Grant: The Government published a White Paper last November on one aspect of regional incentives. The other matters have been fully debated in the House.

Regional Employment Premium

Mr. Strang: asked the Secretary of State for Trade and Industry what further representations he has now received in connection with his decision not to continue payments of regional employment premium after 1974; and what replies he has sent.

Mr. Anthony Grant: I can trace only one letter, to which I replied that R.E.P. was expensive, wasteful, and had not lived up to the claims made for it when it was introduced.

Mr. Strang: Is it still the Government's intention to spend the money saved by the abolition of R.E.P. on improving the infrastructure in the development areas? Will the Government in due course identify those projects which are going

ahead as a direct result of the abolition of R.E.P.?

Mr. Grant: No, Sir. It is certainly the purpose to stop wasteful expenditure in due course, and it will obviously be much more sensible to apply the money saved to improving the infrastructure. As to how the amount works out, the hon. Gentleman will have to wait and see.

Mr. Bob Brown: Does the hon. Gentleman appreciate that there is not a great incentive to existing industry in development areas to expand once R.E.P. is abolished? Surely the Government have something in mind for replacing R.E.P. for the development areas?

Mr. Grant: I will not speculate on policy decisions that may be taken between now and 1974. There are already substantial incentives to existing firms in the development areas.

Dame Irene Ward: Can my hon. Friend tell me how we are using the Local Employment Acts to stimulate tourism on the North-East Coast? I shall have a great deal to say on the problem of shipping when the relevant Bill is introduced. Is my hon. Friend aware that we want a more active policy for our area, as we have a great deal to offer on the North-East Coast and we should like to have the opportunity of offering it?

Mr. Grant: There is nothing to stop the North-East Coast offering it now. The Local Employment Acts are concerned with employment and not directly with tourism. We have had an exchange of correspondence on this and exchanges in the House. I repeat the offer that I have made to my hon. Friend to discuss the problems.

Publicly-Owned Industries (Hiving-Off)

Mr. Frank Allaun: asked the Secretary of State for Trade and Industry if he will now make a further statement of his plans for hiving off profitable sections of the publicly-owned industries.

Mr. John Davies: No, Sir.

Mr. Allaun: Will the right hon. Gentleman take careful note of the decision by the Labour Party National Executive in favour of the next Labour Government's taking back the hived-off sections without


compensation? As this advance warn-has been given, will not investors have only themselves to blame if they burn their fingers?

Mr. Davies: That seems to me to be a hypothetical decision. In deciding any adjustments in the boundaries of the nationalised industries, we must take a very full account of the industrial efficiencies of the concerns involved.

Unemployment (Scotland)

Mr. Sillars: asked the Secretary of State for Trade and Industry what new initiatives he now proposes taking to help arrest the rise in Scottish unemployment.

Mr. Anthony Grant: The hon. Member will recognise that major new initiatives have already been taken to put the economy on a sound footing and to promote industrial development in Scotland. Clearly changes of this magnitude should be given time to work, but we keep the situation under continuous review.

Mr. Sillars: We all realise that it is extremely difficult to deliver that answer with a straight face. Is the hon. Gentleman aware of the number of very reputable individuals and organisations in Scotland advocating a massive public works programme to reduce unemployment this year? Has the hon. Gentleman's Department been involved in any study of the possibility of undertaking such a programme?

Mr. Grant: I am well aware of the hon. Gentleman's point. My hon. Friend the Secretary of State for Scotland has urged local authorities to do just that. He will be having further discussions with various people on this point in the near future.

Mr. Bruce-Gardyne: Will my hon. Friend take careful note of the grave damage done to the Scottish economy by the penal taxation by the last Government, of family companies based in Scotland, and encourage my right hon. and hon. Friends to rectify this as soon as possible?

Mr. Grant: Once again I take careful note of what my hon. Friend says and find myself in substantial agreement.

Mr. William Hamilton: What representations has the hon. Gentleman had

from the Scottish C.B.I. and the Scottish Council on the efficacy or otherwise of the Government's new policies?

Mr. Grant: The Director-General of the C.B.I. has indicated that he is entirely in favour of the policy the Government are adopting.

Natural Gas (Conversions)

Mr. David Watkins: asked the Secretary of State for Trade and Industry if he will make a statement on progress being made on conversion of consumers' appliances to natural gas.

Mr. Ridley: The programme is on target. Nearly 10 million appliances belonging to more than 3¾ million consumers have so far been converted.

Mr. Watkins: I am grateful to the hon. Gentleman for his reply. Is he fully aware of the sheer immensity of the operation, in that there are well over 30 million appliances to be converted? Is he satisfied that the conversion is proceeding with a minimum of inconvenience to consumers?

Mr. Ridley: I am aware of the immensity of the programme. It was always scheduled to take 10 years, up till the end of 1978, but we now hope that by 1975 most consumers will be converted. I believe that the number of complaints from consumers has on the whole been dropping, which is a tribute to the gas boards carrying out the conversion.

B.O.A.C. (Charter Subsidiary)

Mr. Leslie Huckfield: asked the Secretary of State for Trade and Industry whether he will make a statement about the British Overseas Airways Corporation's proposals to form a charter subsidiary.

Mr. Anthony Grant: B.O.A.C. propose to use a subsidiary company in order to enable them to compete in that part of the charter market not open to I.A.T.A. airlines. We are satisfied that they should be enabled to do so.

Mr. Huckfield: I thank the hon. Gentleman for that information. Is not he aware that the cherished darling of the Tory Party, Caledonian-B.U.A., already has a significant advantage in charter capacity which will be further enshrined


in the Civil Aviation Bill? What is he prepared to do to ensure that B.O.A.C. gets its fair share of the market?

Mr. Grant: I do not propose to debate the Civil Aviation Bill with the hon. Gentleman at Question Time. The hon. Gentleman's Question asked about the subsidiary. It is designed primarily to enable B.O.A.C. to compete with international overseas competitors.

Air Misses

Mr. Tebbit: asked the Secretary of State for Trade and Industry if, in order to establish the size of the air-miss problem, he will arrange that during a trial period no disciplinary action should be taken against reporting air misses regardless of blame attributed.

Mr. Anthony Grant: No, Sir. The present air-miss reporting and investigation procedure works effectively. There is no evidence that the possibility of disciplinary action deters pilots from reporting air misses.

Mr. Tebbit: It is my information from traffic controllers that it deters them from making such reports. There have been alarming incidents and a lot of alarmist speculation. Would not my hon. Friend agree that nothing but good could come out of an arrangement whereby controllers or pilots could report, knowing that they would not be subject to disciplinary action, to somebody who could then tell us whether there is anything in this alarming speculation?

Mr. Grant: I recognise my hon. Friend's considerable knowledge and experience of this matter, but the views which he has expressed are not entirely shared by all pilots. However, I will consider further with the pilots' organisations and the airline operators—with whom disciplinary action, if any, lies—what can be done further in this respect.

Mr. Leslie Huckfield: What was the reported number of air misses in United Kingdom air space last year and what does the hon. Gentleman suspect that the true figure should be?

Mr. Grant: I cannot give exact figures because it was only agreed last year that information about the number of reported air misses and the number of aircraft involved should be published. The

survey for 1970 is expected to be published in September, 1971.

Mr. Mason: This is, of course, as we all understand, a voluntary reporting system, but since pilots, co-pilots, crew members, air traffic controllers and some passengers must know when an air miss takes place, it is hard to keep it secret. Can the hon. Gentleman reveal what disciplinary acts have been taken against pilots or controllers in recent months?

Mr. Grant: Not without notice.

Steel Industry

Mr. Moyle: asked the Secretary of State for Trade and Industry whether he is now in a position to make an announcement on the future size and structure of the British Steel Corporation.

Mr. John Davies: I have nothing to add to my statement to the House on 27th April.—[Vol. 816, c. 247–58].

Mr. Moyle: Does not the right hon. Gentleman agree that, if we ever join the E.E.C., its present members will require us to abolish the Consumer Council's power to make representations about price increases by monopolistic corporations? Will he ensure that the Six are asked whether they would allow the Council to retain that power?

Mr. Davies: This is a matter on which we should want to have discussions with the Six in the light of any result of the negotiations in Brussels.

Mr. Duffy: asked the Secretary of State for Trade and Industry whether he is satisfied with the operation of the Iron and Steel Act, 1967; and whether he will make a statement.

Mr. John Davies: The hon. Member will be aware that we did not support this Measure; however I have no current proposals to amend it.

Mr. Duffy: Nevertheless, the right hon. Gentleman will be aware that Part IV of the Act imposes on the Corporation the need to maintain financial viability, taking one year with another. Does not he now think, in view of his recent refusal to grant in full the application by the Corporation for a price increase against the background of an inherited and


accumulating deficit, that he should amend the Act?

Mr. Davies: No, Sir. I propose first and foremost to see the results of the first phase of my review. It is not yet completed but will be shortly. In the light of that, I shall have to make firm decisions about the future.

Mr. Michael Foot: I suppose that the right hon. Gentleman will announce the first phase of his review in a week or two. Will he include consideration of the other half of the 14 per cent. increase for which the Corporation originally asked? We welcome the right hon. Gentleman's intimation that he understands that he must carry out the provisions of the Iron and Steel Act, 1967. Will he reiterate the commitment which the Government have already made under the Coal Industry Bill—which he has introduced—that any proposal for hiving-off any part of the steel industry would first have to be submitted to the House of Commons?

Mr. Davies: The second part of the 14 per cent. price increase asked for by the Corporation will be looked at in the first phase of the review. In reply to the second part of the hon. Gentleman's supplementary question, I shall not do anything that I am statutorily forbidden to do.

Czechoslovakia (Trade)

Sir A. Meyer: asked the Secretary of State for Trade and Industry if he will publish figures showing the exports to Czechoslovakia from the United Kingdom, France, the Federal Republic of Germany and Italy in 1965 and 1970, respectively, from information available from international sources.

Mr. Anthony Grant: The information is published by the O.E.C.D. in "Statistics of Foreign Trade, Series A", which is available in the Library. The figures show that exports from the United Kingdom have increased more slowly than from France, Germany and Italy.

Sir A. Meyer: Does not my hon. Friend agree that this gives the lie to allegations that the Community is an inward-looking organisation? Does it not suggest that the existence of the Community helps to promote trade with

Eastern Europe and that, inside the Community, Britain would find further opportunities for trading with Eastern Europe?

Mr. Grant: That is one conclusion that can be drawn from the figures. I am certain that there is nothing in the Community which would inhibit Britain from trading further with Eastern Europe.

Mr. Deakins: Can the hon. Gentleman say how much of the exports of the Federal Republic of Germany, France and Italy were of subsidised agricultural products?

Mr. Grant: Not without notice.

Price Increases

Mr. Deakins: asked the Secretary of State for Trade and Industry how many requests for advice he has received from private companies who, in view of the Government's policy of controlling inflation, want to know whether they should increase their prices to the consumer because of increased operating costs; and what replies he has sent.

Mr. Ridley: There have been only a few informal requests. The firms concerned have been advised in the terms of the reply, which I gave my hon. Friend the Member for Cheltenham (Mr. Dodds-Parker) on 14th January.—[Vol. 809, c. 106.]

Mr. Deakins: Does not this lack of requests by private firms, in co-operation with Government policy, show that they are unconcerned about controlling inflation, simply passing on price increases to the consumer without regard to the effect on the cost of living? Does it not also show that these firms are not concerned to absorb their cost increases by increased efficiency of operation?

Mr. Ridley: Considering that last year the average level of wages rose by 14 per cent. while the average level of prices rose by 8 per cent., the facts speak directly contrary to the hon. Gentleman's allegation. Competition has had the effect of moderating price increases far more than they would otherwise have been.

Mr. Barnett: Do the Government intend to do anything about prices other than leave them to competition?

Mr. Ridley: What is more, we intend to reinforce competition where it is lacking by working through the Monopolies Commission. As the hon. Gentleman knows, competition has always been the best way to control prices.

Mr. Hugh Jenkins: asked the Secretary of State for Trade and Industry if, in view of increasing price rises, he will now consider fresh measures in order to reduce them; and if he will expedite their introduction.

Mr. Ridley: Increasing price rises are the inevitable consequence of inflationary wage rises. It would therefore be more appropriate for the hon. Member to concentrate his energies upon ways of reducing inflationary pay settlements.

Mr. Jenkins: Is the hon. Gentleman aware that it does him no credit to keep on uttering propositions which are universally known to be fallacious? The part which wage inflation plays in prices can easily be measured and it is generally known to be a minority part. Will he get down to answering the Question? Are not the Government personally, individually and totally responsible for most of the price increases?

Mr. Ridley: I sometimes wonder whether the hon. Gentleman will ever learn anything. If the nation pays itself 14 per cent. more in total, does he expect that that will not go through in prices? Is he further aware that, in the first eight months of this Government, the rise in prices was the same as in the last eight months of the last Administration?

Mr. Dell: The hon. Gentleman said that he was reinforcing competition by using the Monopolies Commission. In what way? There has been only one reference of a monopoly so far in the ten months of this Government's life. What are the Government's decisions about competition policy, if they have come to any, and what specific proposals, if any, have been submitted to the C.B.I. and the T.U.C. and can be submitted to the House?

Mr. Ridley: Discussions have been taking place about the reform of the Monopolies Commission. I must ask the right hon. Gentleman to wait a little longer.

Mr. Biffen: Is my hon. Friend aware that many people think that increases in prices and, indeed, increases in wages are the product of the rapidly inflated money supply from which this country has been suffering? Inasmuch as this has been contributed to by a substantial inflow of overseas funds, will my hon. Friend recommend to the Government that we should follow the excellent example of Germany and float the currency?

Mr. Ridley: I am not responsible for the conduct of monetary policy and questions to do with parity. I would point out to my hon. Friend that within any given total of money it is perfectly possible for a redistribution of income to take place from one section of the community to another, and that is what is happening.

Mr. Heffer: Is not the hon. Gentleman aware that he has absolutely no proof of his contention that the rise in unemployment is due to the increase in wage costs? Is not this the most fallacious argument? Is it not true that the hon. Gentleman and the rest of the Government have discovered one truth—that if a lie is repeated often enough, it will eventually get across to some people who will believe that lie in the same way that some people believed Nazi propaganda?

Mr. Ridley: The hon. Gentleman must realise that it is perfectly possible for any firm or industry to price itself out of its market and thereby increase unemployment. Indeed, that is one of the factors now at work.

Scotland (Official Visit)

Mr. Dalyell: asked the Secretary of State for Trade and Industry when he next proposes to pay an official visit to Scotland.

Mr. John Davies: On 14th May.

Mr. Dalyell: When he comes, will he visit some extremely anxious Rolls-Royce sub-contractors who are bothered about how they are to get paid, not least in the light of an answer given by Lord Carrington in the House of Lords in reply to a Question on this subject?

Mr. Davies: I fear that on this occasion I shall not have the opportunity


to meet Rolls-Royce sub-contractors—I already have a full day—but certainly this is a matter about which I am closely in touch.

Gold and Silver Articles

Mrs. Doris Fisher: asked the Secretary of State for Trade and Industry if he will list the powers which weights and measures departments of local authorities have to investigate complaints concerning gold and silver articles, since the coming into force of the Trade Descriptions Act 1968.

Mr. Ridley: Section 28 of the Act confers powers of entry, inspection and seizure for ascertaining, whether offences against the Act—including false indications of testing, approval, composition and date of manufacture—have been committed.

Mrs. Fisher: As the assay offices now do all the merchandise marking and consumer protection in the gold and silver trades for local authorities, will the hon. Gentleman give an assurance that under the new legislation they will continue to safeguard the consumers?

Mr. Ridley: Who will be enforcing the new hallmarking legislation has not yet been finally decided, but we shall certainly bear the hon. Lady's comments in mind before reaching a decision.

Industrial Development Certificates

Sir G. de Freitas: asked the Secretary of State for Trade and Industry whether he has considered the resolution of the Corby and District Chamber of Commerce, a copy of which has been sent to him, on delays involved in obtaining industrial development certificates for factories outside the development and intermediate areas; and what plans he has for expediting the consideration of applications for such industrial development certificates.

Mr. Anthony Grant: I am not aware of any undue delay in dealing with applications for these certificates, but if the right hon. Gentleman has a particular case in mind perhaps he would write to me.

Sir G. de Freitas: We have written repeatedly. Is the hon. Gentleman aware that under the Governments of both par-

ties there has been delay in granting I.D.C.s to new towns like Corby? Is he further aware that a substantial firm which was granted permission two years ago had had to wait for so long that it reluctantly decided to go elsewhere?

Mr. Grant: If the hon. Gentleman will refer to me any specific cases, I will certainly look into them. The last thing we want is delay in meeting these applications. My only comment is that applications in respect of assisted areas are generally answered almost by return of post, although those for other areas require a good deal of investigation. Firms often ask for a review, and that takes time. However, I will do everything I can to speed up the delivery.

Coal Prices

Mr. Milne: asked the Secretary of State for Trade and Industry if, in his informal consultations with the coal industry, he will raise the question of lowering the price of domestic coal in relation to the overall fuel pricing policy of the National Coal Board.

Mr. Ridley: These consultations are confidential but I shall bear the hon. Member's suggestion in mind.

Mr. Milne: Is the hon. Gentleman aware that there is too great a disparity between domestic coal prices and prices charged to industrial consumers? As price inflation is bearing most harshly on people in the lower income groups, will he take up this matter with the National Coal Board with a view to getting domestic fuel prices lower than they are?

Mr. Ridley: We are discussing this matter with the Coal Board. However, there is some doubt whether domestic prices are subsidising industrial coal prices and I should not like to confirm or deny that statement until we have been able to go into the matter more closely.

Mr. Skinner: Is not the hon. Gentleman aware that only a fortnight ago there was a Prices and Incomes Board Report specifically about coal prices and coal miners' wages which supported my hon. Friend's view that domestic coal prices are largely subsidising industrial undertakings?

Mr. Ridley: I know that it sounds a terrible thing to do, but I reserve the right to disagree with the National Board for Prices and Incomes, if necessary.

Steel Scrap

Mr. Hardy: asked the Secretary of State for Trade and Industry what was the quantity of steel scrap exported in the first quarter of 1971 and the proportion of these exports which went to the Common Market countries.

Mr. Ridley: 60,500 tons of ferrous scrap; and 47 per cent. respectively.

Mr. Hardy: That answer will be of great interest, but in the steel-making areas there is even greater interest in future scrap trading arrangements? Will the Minister not approve of any change in the arrangements for governing scrap trading, particularly where such a change would be disadvantageous to the British steel industry? Will he also ensure that no change in the arrangements is made which confers on the steel industries of the Common Market countries an advantage against our own?

Mr. Ridley: We have been importing almost twice as much as we have exported in the period in question. The present arrangements are that there is an open general licence for nearly all grades of scrap and we believe that that is the right state and we have no intion of changing that state of control at present.

Licensed Premises (Choice)

Mr. Lipton: asked the Secretary of State for Trade and Industry what information and proposals he has received from the Brewers' Society about widening the choice available to the public in places where a large proportion of the licensed premises is owned by the same brewer.

Mr. Ridley: The Brewers' Society have sent me a copy of a factual report on local concentration of ownership of licensed premises, and I am studying this.

Mr. Lipton: Is the hon. Gentleman aware that the subject of freeing tied houses has been under consideration for more than a year, and that the Government have not made any effort to carry into effect the recommendation of the

Monopolies Commission that the system of the tied house should be ended? Is he further aware that it looks as though there is some unholy conspiracy between the Government and the brewers to bog down the whole subject of the tied house until the general report on the licensing laws is received? When will the Government take action to implement the recommendations of the Monopolies Commission?

Mr. Ridley: The hon. Gentleman is quite wrong. The Government have set up a committee to inquire into the form of the licensing laws. The Government have noted with approval the voluntary undertaking by the brewers, which is not called for in the Monopolies Commission Report, about the sale of non-beer products. We are actively studying the subject of the local monopolies of pubs. If that is not taking action after the six years of inactivity by our predecessors, I do not know what is.

Mr. Tom Boardman: Is it not a fact that the Monopolies Commission made no recommendation except that about changing the licensing laws, and is not a review to that end now being conducted by the Erroll Committee?

Mr. Ridley: That is quite true. The only recommendation of the Commission was that the licensing laws should be changed, and my right hon. Friend the Home Secretary immediately set that inquiry in train.

Mr. Dell: Can the hon. Gentleman say when he received the report from the Brewers Society about concentration in particular areas and when he expects to come to a decision about it?

Mr. Ridley: We have only just received it, and I should like to study it before being able to say when we shall come to a conclusion.

Mr. Marten: Is it not a fact that some brewers with monopolies in some areas have already begun to swap pubs with other brewers so that there will no longer be monopolies in those areas?

Mr. Ridley: I have heard of informal proposals of that sort, but I do not think that any such steps have yet been taken.

Mr. Lipton: On a point of order. In view of the completely unsatisfactory


nature of all the replies, I will raise the matter on the Adjournment as soon as possible.

Rolls-Royce Ltd.

Mr. Whitehead: asked the Secretary of State for Trade and Industry if he can now enumerate those constituent parts of Rolls-Royce Limited which it is not intended shall become part of Rolls-Royce (1971) Limited; and which of them have been offered for purchase.

Mr. Corfield: I cannot give full details but the main elements not being taken over by Rolls-Royce (1971) Ltd. are the Motor Car and Oil Engine divisions and a number of share holdings in subsidiary and associated companies. Disposal of the parts of Rolls-Royce Ltd. not to be taken over by Rolls-Royce (1971) Ltd. is a matter for the Receiver.

Mr. Whitehead: Is the right hon. Gentleman aware that it is 11½ weeks ago that the Government allowed the bankruptcy of Rolls-Royce and that it is some weeks since the Receiver ceased effective management of the aero-division? When can we expect a statement about the disposal of these assets? In particular, can the Minister be more specific about the future of the composite fibre division and the Derby engine division?

Mr. Corfield: It may be 11½ weeks since Rolls-Royce went into liquidation on its own account, but the plain fact is that the Receiver is maintaining the management of these companies as it is his duty and interest to do to make them as attractive as possible to potential purchasers. I cannot add anything further to what has already been said with regard to the others matters.

Mr. Benn: Is the right hon. Gentleman aware that the decision by the Government to hive off part of Rolls-Royce at this time will involve a number of major managerial decisions and disentangling at the very moment when it moves into new ownership? Will he not think again about this, at any rate until we have seen how Rolls-Royce settles down under the 1971 company?

Mr. Corfield: I am hoping that the 1971 Rolls-Royce will settle down very quickly indeed and I do not propose to postpone the other decisions for any length of time.

RB211 ENGINE

The Minister for Aerospace (Mr. Frederick Corfield): I should like to make a statement about the progress of the RB211 negotiations.
As the House knows, Her Majesty's Government and Rolls-Royce (1971) Ltd. have been in negotiations with the Lockheed Aircraft Corporation for the supply of the RB211 engine to power the Lockheed TriStar aircraft. We have also had discussions with the United States Government.
Negotiations with the Lockheed Aircraft Corporation have been in two parts. First, Her Majesty's Government have agreed with the Lockheed Corporation to finance Rolls-Royce (1971) Ltd. in the development and production of the engine and to enable it to maintain the necessary support facilities throughout the life of the engine—provided that we can be satisfied that there is sufficient support to enable the TriStar project to be completed.
For its part the Lockheed Corporation has agreed to a substantial increase in the price of the engine, equivalent to some £50 million for the first 555 engines, and to annul penalties under the old contract for delay in delivery of the engine.
On that basis Rolls-Royce (1971) Ltd. has been negotiating a new contract with Lockheed Aircraft Corporation, which is on the point of agreement. The new contract will be governed by English law.
Because the RB211 has been designed for the TriStar and there is at present no other significant market for it, it was clearly necessary, as part of the contract negotiations, to be sure about the future of the TriStar project itself. Given the risks involved in large aviation projects and the known problems of Lockheed, it is clear that effective support for financing the TriStar project can only be provided with the assistance of the United States Government, just as support for the RB211 engine can be given only by Her Majesty's Government.
The United States Administration have now announced that they are seeking authority for the United States Congress to guarantee up to $250 million additional credits for Lockheed, which amount they anticipate will be sufficient to assure the continuity of the TriStar project. Before


providing such guarantees the Administration will, of course, have taken steps to satisfy themselves that the other requirements for the completion of the project are met.
The main outstanding point here is that it will be necessary for both Governments to be sure that the airline customers will still buy the TriStar, notwithstanding the delay and the increase in price. Representatives of Lockheed and the airlines are meeting in London at this moment with Rolls-Royce (1971) Ltd. for detailed discussions on this point and on the arrangements for completing the RB211 project.
Meanwhile, Her Majesty's Government are continuing to finance work on the RB211 engine and the Department of Trade and Industry is discussing with Rolls-Royce (1971) Ltd. arrangements to provide the company with the finance it will need to give effect to the agreement with Lockheed. This will involve some £100 million for completion of the development of the engine: to the extent that costs are not covered by the price increase which Lockheed has agreed there will have to be additional support for initial production engines. Against these costs we must of course set those which would be incurred if the project did not continue and the profit arising from the sale of spares.
The House will appreciate that there are still problems to resolve before we can be sure that RB211 will go ahead. Her Majesty's Government have done everything that they can to establish a basis for agreement that is acceptable to all concerned. In particular they have kept RB211 going, and will continue to do so, in the expectation of a satisfactory agreement. An early decision from the other parties is a matter of increasing urgency. Meantime, the House will appreciate that delicate and complex negotiations still continue.

Mr. William Rodgers: May I first express some concern in that I understand that this statement was first made in the House of Lords at 2.45 p.m. today, by the Secretary of State for Defence, who under the new organisation of Government is not a responsible Minister. I would ask the Lord President to consider precedents for statements of this kind being made first in the Lords and, at an

appropriate time, to tell this House whether he thinks this is common and acceptable practice.
As to the statement, we very much welcome the progress which has been made on the basis of it saving the RB211, and we also appreciate the delicacy and complexity, as the Minister says, of the negotiations. We wish well to everyone concerned in this. May I ask specifically the following questions? Will the Minister say what is the total commitment now, given the extra £100 million for research and development? Will he confirm that there is an open-ended commitment to cover production costs on the first 555 engines? I think this is what he was saying, but perhaps he will be kind enough to be a little more precise.
Secondly, did I understand him to say in reply to a question from my hon. Friend the Member for Derby, North (Mr. Whitehead) a few moments ago, that no date has yet been set for the transfer of the assets from the Receiver to Rolls-Royce (1971) Ltd.?
Thirdly, is he satisfied that B.E.A. is giving full and proper consideration, within its own commercial judgment, to buying the TriStar, and, fourthly, is it still true to say on the basis of his statement this afternoon that the final outcome of the negotiations now depends upon approval in the United States Congress? If this is so, how long is that approval likely to take?

Mr. Corfield: I appreciate the hon. Gentleman's appreciation of the delicate situation in which we are at the moment. As to the total commitment, we estimate that the additional—that is, further—development costs over and above the £47 million that Her Majesty's Government have already put in will be approximately £100 million. The best estimate we have of production costs for the first 555 engines is approximately £80 million and, as I said earlier, we have had an increase in price of £50 million.
Nevertheless, there are considerable hopes, I think not unfounded, that the gap can still be narrowed. With regard to the date for the transfer of the assets, I am afraid that, if I gave that impression, it was quite wrong. They will be transferred at midnight on 22nd of this month. They will comprise the greater part of


the aero-engine, marine and industrial gas turbine divisions.
As to B.E.A. I am satisfied that it is giving full and urgent consideration to this matter. Although, as the hon. Gentleman suggests, the final outcome does to some extent rest with Congress in the sense that no one, particularly in this House, would wish to go on with a project for which there was no money, we anticipate that the interests of both sides coincide and it is not in either of our interests to delay it longer than necessary. I am hoping that this will be a reasonably quick decision.

Mr. Warren: Will adequate labour and material cost escalation clauses be included in the new contract?

Mr. Corfield: Yes, Sir.

Mr. Walter Johnson: May I say how much I welcome the Minister's statement, which will bring very considerable relief to many thousands of my constituents who have had the threat of unemployment hanging over their heads for the last three months?
First, will the Government now give the all-clear for full production at Rolls-Royce? Secondly, it has been widely reported over the weekend that two airlines—Trans World and Air Canada—would like to see a declaration of intent by B.E.A. to purchase the TriStar. Will the Government, as a matter of urgency, ask B.E.A. to send its experts to Lockheed with a view to placing an order for the TriStar? Does the right hon. Gentleman agree that an order from B.E.A. at this time would finally clinch the deal and give the guarantees which the American banks and the British Government want?

Mr. Corfield: Of course a B.E.A. order is of immense value to any aircraft manufacturer. But I can assure the hon. Gentleman that Lockheed's sales and technical staff have been in very close touch with B.E.A. As I said earlier, B.E.A. is making serious and, I believe, relatively urgent consideration of this matter.

Mr. Onslow: Is my right hon. Friend aware that there is general support in the House and in the country for all that has been done by those who have been carrying out these very difficult negotia-

tions? However, so that there should be no doubt about the sums of money involved, could he tell the House the total expenditure from public funds which is now committed in development, and, if he anticipates, as I gathered, a production loss on the engines covered by the initial 1011 order, can he say what the total of this is expected to be?

Mr. Corfield: I do not think I can go very much further than adding up the two sums I mentioned, which come to approximately £130 million.

Mr. Sheldon: Will the Minister reaffirm that it is not the decision of the Government to go ahead without the guarantee as to the future of Lockheed? Does this guarantee depend upon Congressional approval alone, or is there any other method which the Minister is at present considering? Also, will he make some comparison between the present estimated cost of saving the RB211 and the cost of saving it before the Receiver was put in?

Mr. Corfield: On the first part of the hon. Gentleman's supplementary question, I know of no method other than the approach by the American Administration to Congress, and I think that we can safely assume that the American Administration would not have taken that course had not they thought that that sum was necessary for the viability of Lockheed and it was the only way that it could be provided.
A much more detailed cost comparison will appear in the White Paper. But I can assure the hon. Gentleman that the cost is very much less under the present negotiations.

Mr. Tebbit: Does my right hon. Friend agree that the requests for pressure to be put on B.E.A. are, or could be, another highly dangerous precedent? Air lines are supposed to operate in their commercial interest, and nothing can do a project more harm than for it to be seen that the Government have to twist airlines' tails to get them to buy it.

Mr. Corfield: I entirely agree with my hon. Friend that twisting the tail can be self-defeating in this connection.

Mr. Dalyell: In the light of a reply given by Lord Carrington to Lord


Beswick, can the right hon. Gentleman clarify the position of the sub-contractors who still await money for parts which they have already supplied to Rolls-Royce? Are they in a less favourable position in the queue than others?

Mr. Corfield: No, I do not think they are in a less favourable position in the queue than others. I understand that the Receiver is issuing instructions as to the approaches which they should make and the people they should approach in order to clear their accounts with him from the moment that the assets are transferred to Rolls-Royce 1971. I think that those instructions are going out today. I have no reason to believe that the sub-contractors are in any worse position than other people.

Mr. Drayson: My right hon. Friend says that there are still problems to be resolved. Are any of them technical, or can he assure the House that the engine fulfils all that is required of it?

Mr. Corfield: The technical diagnosis is very encouraging, but I have been in this game just long enough never to give a guarantee.

Mr. Thorpe: Is the right hon. Gentleman aware that not only is his statement welcome but that we devoutly hope that the renegotiation will be successfully achieved? I should like to ask him two questions.
First, what is the position of Air Holdings Ltd., which is under an obligation to buy 50 and has already sold some to Air Canada? Has that concern been requoted with a new price? Secondly, while agreeing wholeheartedly with the tenor of the right hon. Gentleman's statement, may I ask him whether he agrees that nothing would be worse than to give the impression to Congress that we are setting a rigid time limit to its deliberations, because even with efficient administrations legislative approval sometimes takes time?

Mr. Corfield: I take the right hon. Gentleman's latter point. However, I am sure that he will appreciate that one cannot go on with rapidly rising costs of going into full production to meet the time scale absolutely indefinitely. The Air Holdings contract is currently the subject of renegotiation with Lockheed.

Mr. McMaster: While congratulating my right hon. Friend on the considerable success he has had in renegotiating this unfortunately ill-drafted contract, which was originally entered into by the Labour Government, may I ask him whether he agrees that the delay in delivering the engines and getting the plane into the air might, in the current depressed state of the aircraft industry, work to our advantage? Can he say how much he expects to be made out of profits on spares as a result of the sale of these engines?

Mr. Corfield: I do not think that delay ever works to one's advantage, although I think the disadvantage may have been lessened by the current state of aircraft industry finances. One cannot forecast the return on spares. Apart from anything else, they arise a long time after the initial investment, and they have to be discounted over very considerable periods. It would be unwise for me to give a figure.

Mr. Benn: While joining in the welcome of the Government's decision to renegotiate the contract, with their substantial amounts of public money, may I ask the right hon. Gentleman to clarify one point about the subcontractors? Can he assure the House that, in addition to the £130 million he mentioned, there will not be a loss which the sub-contractors are expected to carry because of the bankruptcy of Rolls-Royce from which Lockheed, under the proposed arrangement, will in some sense be protected by the action of the two Governments?

Mr. Corfield: No, I do not think there is any question of that. The right hon. Gentleman has raised a rather technical question. I will look into it and write to him.

Mrs. Hart: I warmly welcome the statement and congratulate the Minister on the progress he has so far made. However, does he agree that B.E.A.'s purchase of TriStar would be a valuable extra support in the whole project? Can he assure the House that he is at least keeping in very close touch with B.E.A. in its present consideration of the question?

Mr. Corfield: Of course I agree that it would be a valuable fillip, as it would be to Douglas and the A300 consortium.


This is a very valuable order. Of course we are closely in touch with B.E.A.

Several Hon. Members: rose—

Mr. Speaker: Order. We must move on.

PERSONAL STATEMENT

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): With your permission, Mr. Speaker, and that of the House, I should like to make a personal statement.
The House will recall that in the course of my speech during the debate on unemployment on 29th April I gave figures, recorded in column 748 of HANSARD, for the number of inquiries by industrialists about investment in the assisted areas and compared the number of inquiries in the first quarter of 1970 with those in the first quarter of 1971.
I regret that I have now been informed that the figure for the first quarter of 1970, which I quoted as 538, was not correct. This figure referred to the number of inquiries by people other than industrialists and should not have been used in making the comparison I did. The number of inquiries by industrialists during the first quarter of 1970 was in fact 2,400; the number had declined to 1,083 during the first quarter of 1971 rather than increased as I had suggested.
I wish to apologise unreservedly to the House for having given, in good faith, information which was incorrect.

BASIC FOOD PRICES

3.49 p.m.

Mr. George Wallace: I beg to move,
That this House, noting the increase in prices of basic foods with the consequent hardship to families in areas of low average wages and increasing unemployment, but not classified as development areas, calls upon Her Majesty's Government to set up an organisation for consumer protection with powers to scrutinise and check prices of essential goods and services.
The last time I was fortunate to move a Motion on a private Members' day was some months ago when I raised the question of overseas aid and the needs of developing countries. We had a good debate and at the end my Motion was accepted by the Government and by the House without a Division. I sincerely trust that I shall receive the same broadminded treatment today.
From the needs of the underfed millions we come back full circle to our own doorsteps and the most pressing problem of all, certainly for the wives of workers, the domestic chancellors of the exchequer—the worries and anxieties which they are facing due to rapid increase in prices, particularly of basic foods.
I have attempted to question the Minister on this point but, for a technical reason, it was not possible and so I put down an Early Day Motion and, thanks to my good fortune in the Ballot, it has now become a Motion before the House. I speak in this debate as one who has first-hand experience of family shopping every week.

Mr. W. E. Garrett: Have not we all—at any rate on this side?

Mr. Wallace: I know that prices are the main topic among housewives in the supermarkets and other shops. By sheer chance this morning I ran into real trouble on this issue. I went out to get a few odds and ends we had not got during the weekend shopping, and I was checking on a few prices. It so happened that I saw a couple of ladies having a heated argument. Being a polite sort of fellow—and minding my own business—I asked "What's the trouble? Prices?" Then, literally the balloon went up. I got the impression that it was supposed that the prices were all my fault. The right hon. Gentleman the


Member for Lowestoft (Mr. Prior) should have been with me and he would have understood exactly how housewives feel about this. The lady's complaint which was given to me arose from her friend's shopping bill, which had gone up from £5 to £7 a week, and, as she told me, "It is time we pulled something down." I rather gather she meant prices.
What is even more worrying to those of us in this House who have some practical experience of shopping and of family finances is the difficulty of elderly pensioners vainly trying to purchase an adequate diet out of inadequate incomes.
As the Minister is probably only too well aware, the local evening newspaper in my constituency—in his birthplace, if I am not mistaken—the Eastern Evening News, which covers, particularly, North Norfolk, has since January been conducting a survey of prices, mainly of basic foods, purchasing the same brand or quality of foods each month at the same supermarkets; 21 items were checked. This fair survey has revealed that prices of mainly basic foods have risen by 21½p—4s. 4d. in good old English money—since January last up to and including April, with the biggest increase in April of 11½p, after the Budget and after the announcement of the reduction in S.E.T.
The main increases were in beef, butter, bacon and potatoes. A random survey of items other than staple foods revealed the somewhat startling fact that it would appear that often shops, because of rapid price increases, posted new price labels over old. Two items pictorially displayed in this newspaper showed, when the old labels were removed a price rise for one, a curry rice preparation, of 2p; that of another preparation, of 1½p.
The Eastern Evening News survey, however, is not related to a given family budget but deals only with a series of items. My wife and I have considered this matter very carefully. She is a very experienced and very careful shopper. We have discussed it and we have discussed price rises from the family budget angle, that is, not only weekly quantities of basic foods bought at weekends, and during the week, but of all the other items in the weekly shopping list—items such as soaps, washing powder, breakfast cereals, tooth paste, etcetera. We estimate that the prices of essential foods and goods have increased by approximately

5s. per head since January. That means for an average family of four an increase of £1 a week.
This estimated figure does not include fuel, light, fares and similar items, all of which have increased. Anybody who lives in an outer London suburb, as I do, will know what fare increases mean. Incidentally, I noticed in the Evening Standard of 6th May that Cow & Gate infant food is to go up by more than 25 per cent. in June, and the main reason, the firm says, is the sharp increase in the price which manufacturers have to pay for liquid milk.
It must be obvious to hon. Members on both sides of the House that if this situation continues the increase of pensions—which is welcomed by both sides of the House and is to take effect next September—will be more than wiped away. Similarly, there is the question of wage-cost inflation we hear so much about particularly from the Government benches, and from all that one would think, from the speeches made and the Press articles written, that the main pressure for wage increases stems from the ambitions of trade union leadership. That is not so.
Some hon. Gentlemen present—I see at least one here—will remember the postal strike, and how 28 wives of Norwich postmen came up to this House of Commons. They had not a clue how to lobby. I instructed them. They interviewed Members on the Government side. One did not exactly want to meet them. He is present in the Chamber at the moment—the hon. Member for Yarmouth (Mr. Fell). He will recall the occasion.

Mr. Anthony Fell: I am grateful to the hon. Gentleman for giving way to me. It was not a question of my not wanting to meet them. It was that they did not come from my constituency, and I thought it right that they should meet those Members of Parliament from whose constituencies they came.

Mr. Wallace: The hon. Member rather overlooks the fact that they were postmen's wives and that it was a national postmen's strike, and that their views were views which should have been taken into account by hon. Members. However, we will forgive the hon. Gentleman and not become bad friends.

Mr. Fell: I am most grateful to the hon. Gentleman for giving way again. It is a fact that I sought one of them who was from my own constituency and talked to her for half an hour.

Mr. Wallace: O.K. In that case I apologise, if I have got it wrong, but the other ladies were very upset at the time.
The main point I want to make about it is that those ladies came to see Members of Parliament. They met lady Members, too. They met in a Committee Room. Eventually—and I give my right hon. Friend great credit for this—the Leader of the Opposition asked to see them and asked them to come to his room, and that very kind act was greatly appreciated by them. I think the House will agree, aside from party matters, that if the Leader of the Opposition can do that it is certainly a good thing to do. All these women told my right hon. Friend of their complaints about price increases, and explained that their husbands' wages were not sufficient to feed their families adequately. That is just one example.
I wonder whether right hon. and hon. Members have ever given any thought to the pressures on workers from their wives in the home. Make no mistake about it. That is where the pressure begins. A wife and mother working seven days a week with no overtime rates, worried and anxious over rising prices, struggling to give her family an adequate diet, is bound to take it out on her husband. It is obvious that pressure for wage increases stems from the housewives in the home and not from the ambitions of trade union leaders.
I have said already that I have some experience of shopping. Without wishing to cash in on the occasion, I have also experienced the struggle of trying to live on low wages, and I have known the soul destroying effect of long-term unemployment. The average housewife is also worried about the possibility of her husband losing his job.
In Norfolk, there has been a serious increase in unemployment. At the moment, more than 10,000 people are out of work. The unemployment rate is 4·4 per cent., which is higher than the national average. The peak figure in the Norwich area is 40 per cent. more than a year ago, and total unemployment

in the Norwich district committee area is in the region of 5,000. To do the hon. Member for Yarmouth credit, his concern about the situation is such that last week he led a deputation from his constituency to the relevant Government Department.
In the Norwich area, a determined effort of self-help is being made, and I think that the House should know about it, though it brings back memories to me of the provision of work schemes in the days of the great depression. There is a good spirit of co-operation. Norwich City Council has decided to increase capital works schemes by another £500,000, and I understand that there is £8 million worth of work in the pipeline.
On 22nd April, the Executive Committee of Norwich Trades Council presented a report to its members outlining possible lines of action to give employment to workers not only in the city but from a large surrounding area, including Yarmouth and many other constituencies in North Norfolk. From the report, I understand that there is a total of 107 acres of land now or potentially available on 13 different sites for industrial development within the city area. In addition, the Norwich Union Insurance Company is prepared to erect factories and warehouses on a pre-let basis to tenants' own requirements on a further eight acres of land.
The city council is and always will be willing to provide new houses for key workers in industries coming to the area. The City's Advisory Committee for Development of Industry, representative of employers, trade unions and the local authority, is giving urgent attention to the problem.
In passing, though one does not normally mention civil servants, I must pay tribute to the manager of the Norwich area of the Department of Employment, who is more than pulling his weight in seeking solutions to the problem. Tribute must also be paid to the work of the Church, through our bishop, who is now unfortunately leaving the diocese. We have industrial chaplains working in conjunctions with managements and trade unions and getting down to the job in no uncertain fashion. It is a situation of which we can be proud. I am sure, too, that the House will appreciate the


positive approach of the trade union movement in the area in this great combined effort to overcome the problem by self-help.
The Government must recognise the efforts of people who are trying to solve their own problems, and I appeal to right hon. and hon. Gentlemen opposite not to obstruct, delay or withhold consent for capital work schemes of the local authority. I ask them to give all possible help and advice to further the local authority's effort to encourage industry to move to the area.
There is one positive action that the Government can take now, and it concerns the Sizewell "B" power station. Construction should have commenced in January, 1971, but it has been postponed for 12 months. Bearing in mind that the power needs of the area are not covered adequately, a decision to proceed at once could result in the employment of workers from a large area of Norfolk and Suffolk extending from north of Norwich, down to Ipswich and possibly across to Cambridge. I appeal to the Government to give this matter their urgent attention and to show the same sense of urgency that has been shown in Norwich by the city council and many other bodies working on solving the problems through their own efforts.
East Anglia is an area of low wages. Average figures are £2 a week below the national average and £3 below the South-East area average. One way of overcoming this is by competition for labour, and that will be created by introducing new industries in to the region. In addition, some trade unions should look at their practice of establishing national minimum wage agreements regardless of region, since these perpetuate the low wage areas. In making that remark, I have the full support of the Norwich Trades Council.
The problems of a low-wage area are added to by rising prices and unemployment. In our area, the decision of the Eastern Counties Omnibus Company to cut out concessionary fares for schoolchildren has imposed further hardship, especially in the rural areas. What is more, in the first week of the imposition of the new price for schools meals, the take-up of meals in Norwich dropped by 20 per cent.
It is no good talking about wage inflation to people in low-wage areas. I say that to any Government spokesman who may mention wage-cost inflation. It just does not register: people have enough on their plates trying to make ends meet because of price increases.
Having operated the parish pump, I hope with some effect, I return to the national problem of the rising prices of basic foods. The new import levies on meat imposed by the Government will increase already high prices. The levies have also upset the butchers. I listened to the Minister of Agriculture speaking on the B.B.C. programme "The World This Weekend", in the early stages of which I played a tiny part, having raced to the studio at great personal inconvenience the night before. The butchers have a case. I cannot speak with experience of bulk imports of other foods, but I have some experience of the meat business.
I have nothing against the first-hand importer, who does a good job in finding supplies and bringing them to the United Kingdom for the consumer. He deserves a fair and reasonable reward for his services. But it is my experience that in periods of short supply shipments of meat often change hands several times before the ships carrying them reach the United Kingdom. Each change of hands carries a small profit margin, and the final cost is added to without any possible service in bringing the goods to the consumer. It may be good business practice, but it is not in the public interest.
Another matter which needs attention is the so-called free offer. I can give the House one example, though I did not yield to temptation. The other week, I was out doing a bit of shopping. I was looking for soap. Normally, we use a certain brand which, of course, I shall not mention by name. I noticed that one bar of soap had attached to it a beautiful hairbrush, which was a free offer. There are many such examples. These gimmicks are being introduced when housewives would much prefer a straight reduction in price. I believe, and perhaps I am a little old-fashioned, that quality and price are the best salesmen.
We are always being told to shop around. I wish to goodness that people who give that advice would try shopping


around themselves. Just imagine the poor housewife going around the shops with her children trying to compare prices, coming to a decision, and then dragging all the way back to the first shop she went to. It is all very well if one is physically fit—and I must say that I get so exhausted in the process of shopping that when I get home my wife says, "It is time to get yourself a drink"—but for old age pensioners and others it is sheer misery. Therefore, let us have less talk about shopping around since it is complete and absolute nonsense. If the Conservative Party wants to cash in politically on this subject, they should drop the idea of shopping around, because it is doing them enormous harm.
What needs to be done? In the days of the previous Government it was the selective employment tax that was used as an excuse for price increases. Today, the ready-made excuse is the wage-cost inflation. Some increases may be justifiable, some not, but there is no protection today for the housewife. The National Board for Prices and Incomes and the Consumer Council provided some degree of protection, but they have gone. Let us make no mistake about it, food prices will become a crucial issue as we come nearer to the possibility of joining the Common Market. The main feeling in my constituency against the Common Market is the fear of rising prices. If there is any logical case for going in, I assure the House that it will disappear if there is any possibility of price increases arising as a result.
The Minister, on the radio on Sunday, admitted that he expects many food prices to increase during the coming months. The right hon. Gentleman knows this, and it is certainly a serious problem for the low-wage earner and the old age pensioner. The right hon. Gentleman also said in his broadcast that it was not so much a question of the cost of living, but of living standards. Surely to the low-wage earning family and the old age pensioner living standards are very much affected by rising costs of essential foods. This is the main element in their outgoings and is a very significant factor. I understand that butchers are now finding a ready sale for scrag ends of mutton and lamb, particularly to old age pensioners. That takes us back to the old social patterns of the past.
In these circumstances I feel that the Government, in fairness to the housewife, should set up some consumer protection organisation to watch food prices, to check the validity of any increases which the Government or the public might refer to such a body, and to make recommendations to the Government or Parliament for action. I have no exact details in mind for such a body, but I feel that it should contain among its members a number of practical housewives who, let us face it, know more about shopping problems than the whole of the Government and Parliament put together. The retail and wholesale trades should be represented, as well as the Government.
It would appear that my suggestion has already caused some interest. It was reported in the Eastern Daily Press at the weekend that a village grocer in Norfolk had suggested that women's institutes throughout the country should take over the job of watching food prices and exposing any increases. The small shopkeepers also are expressing great concern. This is only natural because of the personal relationship which exists between the small shopkeeper and the customer. This situation does not exist in the large supermarkets.
There is increasing speculation about a possible return of an incomes policy either on a voluntary or imposed basis. I believe that no Government of any political complexion will ever get an incomes policy to work unless it is accompanied by a determined and positive policy to keep down the cost of basic foods and other essentials. I feel sincerely that my Motion is a step towards that end and I appeal to hon. Members in all parts of the House for their support in accepting this Motion and in seeking some tangible expression of concern by the Government.

4.16 p.m.

Mr. Evelyn King: The House is most grateful to the hon. Member for Norwich, North (Mr. Wallace) for raising this important subject today, and also for the fact that we have present in the debate the, let us call him in this context, Minister of Food. We are also grateful to the hon. Gentleman for the moderate way in which he introduced his Motion. He spoke of a broadminded approach on this subject and I should like to support him in that sentiment.
All the elements of which he spoke in relation to the constituencies in Norfolk apply no less to my constituency in South Dorset. I wish in some ways that he had dwelt at greater length on the preamble to his Motion which mentions
… areas with low average wages and increasing unemployment but not classified as development areas".
He gave figures relating to North Norfolk, most of which would be identical for South Dorset, which has an unemployment rate of 4·4 per cent. My constituency has an average earnings rate of £24·8 as against the national average of £28·9. An interesting picture emerges if we compare both those constituency average figures with the development areas. I have never been able to understand why the constituents of either North Norfolk or South Dorset should be taxed in order to give their money to development areas, such as the Merseyside, where in fact the average wage is higher and the unemployment rate is just about the same. I hope that, in so far as he has any influence on his own party, which has done a great deal for development areas, the hon. Gentlemen will draw their attention to the fact that what one puts into development areas one inevitably takes out of other areas. In some cases this may act against them unfairly.
To turn to the matter of food, it would be rash for any hon. Member in this debate to make many party points, since whatever defects exist in the food price mechanism—and there are certainly defects—when one Government has been in office for the last 11 months and another for the last six years, it is difficult to claim that faults exist in greater measure on one side or the other.
May I try to put the matter in perspective? In England some £6,000 million is spent on food every year, which represents 21 per cent. of consumer production. The effect of increased food prices can easily be over-estimated. To put it another way, if food prices rise by 5 per cent., the effect on the cost of living is about 1 per cent. In 1970, housing costs rose by 12 points, transport costs by 11 points, service industries by 12 points, but food rose by only 9 points. If one relates the increases in one commodity to another, one will find that food increases are not as fearful as some suppose. There is an emotional memory from the 19th

century—Sir Robert Peel, the Corn Laws, and all the other troubles of that century—and this is a hang-over. Excluding the retirement pensioner and similar poverty groupings, the effect of food prices on the population as a whole is less than might be supposed. If one seeks to deal with retirement pensioners and so on, they are better dealt with by an addition to their salary, wage or pension than by trying to deal with food prices, the effect of which, upon 90 per cent. of the population, is quite different.
Regarding the housewife, I know that the phrase "shop around" has been much used, and I have my doubts about it. I hope that I may be forgiven for saying so, but the housewife is not awfully good at shopping around. Most supermarket owners would say that if one wants to sell an article, it has little to do with value, price or bargaining ability. One puts it at eye height on a shelf and the housewife will buy it. That is not a great tribute to the housewife. Many housewives, too, are prepared, and anxious, to pay more than they need to for convenience foods or for quality. The supreme example is potatoes. I used to grow them and I sold them at about £20 a ton. They were bought in a greengrocer's shop at about £30 or £40 a ton. If they were bought by the pound they would be at another price. If they had been put in paper bags as potato crisps, by that time they would have become £1,000 a ton. Many housewives prefer to buy them as potato crisps or wrapped in paper, cooked and ready to eat, than to buy them in another way. There are many other examples. There is a desire to buy oven-ready, ready-packed foods which are naturally and necessarily more expensive than they need to be.
I want to make some practical suggestions. May I first free from blame the persons to whom blame is sometimes attributed, but who deserve none. It is not the farmer's fault. Every statistic shows that the farming section of the community has immensely increased production a rid efficiency. No one who knows the figures would suggest that farmers' profits are in any way excessive. Between 1964 and 1970 food sales rose by £1,376 million. Farm sales rose by only £345 million. To put that in a more effective way, for every £1 spent in a shop on


food from a farm, the farmer received 40p, and that is a very small amount. Therefore, we exempt the farmer.
On the next stage, the shopkeeper, I can do no better than to quote Lord Peddie's report, produced last month:
Nowhere in the food trade did we find more than a slight rise in gross margins. In some cases they declined." "In small shops there was a very lost level of profit." "For multiples, a low return on capital—lower than in other distributive trades.
That is the report of the National Board for Prices and Incomes. We exempt the farmer and the shopkeeper.
The next stage is the food manufacturer. He, too, is hard-pressed, and the figures, which are all open to be seen, show that the return on capital of food manufacture is about 13 per cent. No one could call that excessive.
But who is to blame? This is where one comes to the third part of the Motion, in which the hon. Gentleman asks the Government to set up a committee. It is largely Governments who are to blame—all Governments. Here I am having no regard to party. It is simple to analyse where the increased food prices have come from. In almost all cases they come from Government action. A single example of the element which comes highest in food costs is transport. From 1964–69 transport costs increased by 21 per cent. Again, I quote Lord Peddie, and the Opposition will value his opinion:
The increase in vehicle licence duties and fuel costs has had a serious impact on costs. A single firm is spending £300,000 a year on fuel tax.
That is just one item. Then one turns to the labour force; first to wages and, second, the cost of employment. Between 1964 and 1970—I use those dates only because they happen to be the dates that I have, and not to cover the period of any particular Government—what I call the poll tax, that is, national insurance plus S.E.T., a tax imposed upon an employee, rose by 110 per cent. That is why food prices have risen. Government action has done that. It may be the action of all Governments. S.E.T. alone has directly added three quarters per cent. to the price of food.
On wages, U.S.D.A.W. has now submitted a claim for a minimum wage of

£20 for shop assistants. I do not regret that, I support it—as long as hon. Gentlemen opposite will carry through their logic and understand that in putting forward the claim the union, too, are doing something to raise the price of food to some extent.
What can we do to help? There are a number of Government regulations and laws which are outmoded. I spoke on this matter briefly a few months ago when I introduced a Bill designed to give shopkeepers greater liberty on the hours that their shops could open. I do not ask hon. Members to accept only my opinion, but also the opinion of the Consumers' Association and the Consumer Council. It is also the opinion of Lord Peddie that there should be greater liberties as to when shops may open. There can be no difficulty in seeing why this is so. If we look at the table in the same report, we find that only 4 per cent. of housewives shop on a Monday; 43 per cent. shop on a Friday. If we enable shops to open at such hours as the maximum amount of business is done, we shall be able so to reduce costs as to effect, to some extent at least, the charges which the shopkeeper will have to make for his goods. That is one way in which the Government can help.

Mr. James Wellbeloved: The hon. Gentleman has referred to retail trading. I am sure that he would not want the House to be misled. He is aware that every responsible retail trade organisation has declared that it is against the alteration in shop hours and against the Bill that the hon. Gentleman introduced.

Mr. King: I am afraid that the hon. Gentleman has misinformed himself. He would do well to read the debate in HANSARD. He would find that the reverse of what he has said is true.
I move on from the small shop to the large one, the multiple shop. For every £7 rung up on the tills of shops £1 is now spent in multiple shops or in supermarkets—at any rate, in large stores. Therefore, what the big stores do is of vast consequence.
I have no doubt that a development is soon to take place which is already common in France and in America—the out-of-town shopping precinct. Some people


call it the hypermarket. There are valid reasons for its development and it is tremendously germane to price levels. First, rents will be less. Second, hypermarkets will be popular with the customer because more and more customers are shopping by car. It may be argued that at present cars are owned only by a certain income group, but this is changing over the years. It is becoming impossible to take cars into town centres. Hypermarkets can be sited out in the country with doors all the way round so that cars can be brought almost to the door of the shop.
I have sympathy with housewives. Thirty-nine per cent. of housewives carry away from shops 20 lb. or more of goods. Sixteen per cent. of housewives carry away loads of more than 40 lbs. These are considerable loads for women. This is one reason why hypermarkets, where vehicles can drive to the door and where trolleys can be pushed to the vehicle, are bound to emerge.
I shall not give the source of the next figure that I shall quote, but I have gone to some trouble to ascertain it. Having consulted a number of firms, my information is that once a hypermarket is established there can be a reduction in food prices of about 3 per cent. Such a reduction is well worth having.
Adding all these things up we can get to the things which Governments can do.

Mr. Wallace: The hon. Gentleman keeps talking about people driving cars to these places. I have not got a car. I cannot drive. What does he suggest for people who must get on without cars?

Mr. King: There are other shops too. Probably the hon. Gentleman did not hear my opening statements when I talked about the plight of pensioners and the poor. I explained that I thought that such people were better dealt with by cash allowances. We must treat food prices as something which affects 90 per cent. of the population. There will be an enormous increase in the number of car owners over the next 15 years.
The development of hypermarkets is being held up by town and country planning regulations and by what I regard as rather foolish restrictions in many counties. I hope that my right hon. Friend the Minister of Agriculture, Fisheries and Food will consult my right hon. Friend the Secretary of State for the Environ-

ment with a view to removing these obstacles.
This is the second time in one week that I have mentioned this matter. The last time planning restrictions were held to be responsible in part for an increase in the price of minerals affecting my constituency. In this case they could be responsible for an increase in food prices or at least for preventing a decrease in food prices.
I have no doubt that there was good sense in what the hon. Member for Norwich, North said. In so far as he meant that the Government should set up a committee which might well have upon it more business men than Government employees to indicate the sensitive points—transport, tax, planning position of shops—which all added together would help to reduce the price of food, I have no doubt that he has done a valuable job in bringing this matter to public attention.

4.34 p.m.

Mr. Gerald Kaufman: My hon. Friend the Member for Norwich, North (Mr. Wallace) and the hon. Member for Dorset, South (Mr. Evelyn King) have spoken as representatives of constituents in mainly rural areas and low-wage earners. I represent part of one of the largest cities in the country but a part of that city in which wage levels are often very low, a part of that city in which unemployment is rising fast, and a part of a city where we, in common with our neighbours in the North-West, are asking for intermediate area status. Therefore, my area, although very different from the areas represented by the two previous speakers, is very relevant to the Motion. I congratulate my hon. Friend on introducing the Motion.
In one of the main shopping streets in my constituency on Saturday morning a document was distributed to housewives whose receipt they greatly appreciated. This document was labelled, "Grocer Heath's Special Offer". Any housewife who stopped to look at the document would look at what "Grocer Heath's Special Offer" was. It was:
Shopping prices up! Rents up! Rates up! Unemployment up! That is Toryism.
"Grocer Heath" himself—the Prime Minister—made his own special offer to the country on 16th June of last year. I will read that part of the Prime Minister's


special offer—his now notorious statement of 16th June—which is relevant to the Motion:
That alternative is to break into the price-wage spiral by acting directly to reduce prices. This can be done by reducing those taxes which bear directly on prices and costs, such as the selective employment tax",
half of which has now been taken off with no noticeable effect on prices
and by taking a firm grip on public sector prices and charges such as coal, steel, gas, electricity, transport charges and postal charges.
This would, at a stroke, reduce the rise in prices, increase production and reduce unemployment.
The Motion refers to
prices of essential goods and services",
to which the Prime Minister referred on 16th June. I shall pass over the Prime Minister's statement about the reduction of unemployment. In the Manchester travel-to-work area unemployment among males since this Government came to power has risen by 37 per cent. I will go through the list of goods and services the price of which the Prime Minister said that his Government would reduce at a stroke. I will do this one by one with two exceptions, because they are not local exceptions, and explain the way in which they have affected the Manchester area.
The two exceptions are the postal charges which, despite a wholly inadequate pay offer to the postmen, have risen once and are rising again, and steel, where there is a 7 per cent. price increase which the Prime Minister boasted about at Question Time last Thursday as apparently a price reduction. If a 7 per cent. increase is a reduction, we can now understand what they mean when they talk about limiting increases.
What about the other goods which the Prime Minister referred to in his statement? How have they affected the Manchester area? He talked about coal. The price of domestic coal per ton in the Manchester area has risen by 5 per cent. since this Government came to power. He talked about gas. The price of the average gas bill from the North Western Gas Board, which I have consulted about this, has gone up by 6 per cent. since this Government came to power. He talked about electricity. The average quarterly electricity bill in the Manchester area—I have consulted the

North Western Electricity Board about this—has risen by no less than 12 per cent. since this Government came to power. The average electricity bill in the Manchester area has gone up since last June from £8.70 to £9.75.
As for transport charges, Selnec, which is under Conservative control, has increased bus fares by an average of 4 per cent.
What about other charges? Let us say that one of my constituents wants to go on holiday to Blackpool—not very far, not by many standards of continental holidays now an expensive place to go to. The return fare to Blackpool has risen from £1.40 to £1.60. That is an increase of 14 per cent. If he can afford only a day trip he will find that the cost of that has risen from 70p to 80p—again an increase of 14 per cent. If, in indignation against these price increases, he wants to demonstrate outside Downing Street, in London, about the Prime Minister's broken promises, he will find that the cost of a day return ticket from Manchester to London has risen from £3.50 to £4.40—a 26 per cent. increase. In the remote eventuality of his thinking of going for more than a day he will find that the fare—again, second class—has risen from £5.80 to £7.55, which is a 30 per cent. increase.
If, in despair at these and other price increases, the worker in my constituency decides to try to forget everything by getting a drink, and chooses the most popular brew in Manchester—which, appropriately enough is called Wilson's"—he will find that the cost of a pint of mild has risen by 11 per cent., from 9p to 10p, and the cost of a pint of bitter has increased even more—by 15 per cent., from 10p to 11½p.
The most serious increase, as well as one of the highest—33⅓ per cent.—has been in the cost of school meals. In Manchester as a whole this has had a devastating effect. The Manchester City education officer has given me figures for the reduction in the number of school meals taken in Manchester. In Manchester, on a day in the spring term—before the price rose from 9p to 12p—and on a day in the present summer term, respectively, the number of children taking school meals fell from 62,174 to 57,705—a reduction of 4,469. That was


a far greater reduction than the estimate given to me by the education officer when I asked for one in advance.
In my constituency of Ardwick the reduction has been from 7,062 to 6,506—a reduction of 556. The percentage reduction in my constituency, which contains some of the most needy areas in the city, is higher than that for the city as a whole. The alarming thing is that whereas there has been a slight increase in the number of primary school children taking school meals there has been a devastating reduction in the number of secondary school children doing so. For the whole of the city the reduction has been nearly a quarter, but in my constituency it has been more than a quarter. The children are not getting the hot meals that they were getting before.
The question is: can the housewife compensate by feeding her children well when they are at home? The Financial Times grocery index shows that since this Government came to power the average price of groceries has risen by 10 per available, but I have consulted The Grocer—a publication that Conservative Members used to quote with great effect when they were in opposition. That publication gives some interesting examples. It shows that the price of tea has risen from 8½p to 9½p per quarter since the Government came to power. The price of margarine has risen from 11p to 13p.
Let us suppose that the mother, especially if she goes out to work—if she can get a job—is unable to concentrate on feeding her children well every day of the week, and wants to give them a good meal at the weekend. What has happened to the price of a joint, about which my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved) has spoken with great effect? One of the most prominent of the many butchers in Manchester told me that since the Government came to power the price of the Sunday joint has risen by between 36 per cent. and 49 per cent. That increase has occurred since June last year. Nine months ago the average price was between 17s. and 22s., in the old coinage; it is now between 25s. and 30s.
That butchers' spokesman put the whole blame for the increase on the Gov-

ernment. He blamed their levy policy. The Minister of Agriculture, Fisheries and Food will not be surprised to hear that, bearing in mind that when he was at a dinner the other day he was told what the impact of this levy policy would be in the period ahead.

The Minister of Agriculture, Fisheries and Food (Mr. James Prior): Will the hon. Member tell me how a levy that has not yet been introduced can possibly affect meat prices?

Mr. Kaufman: The Minister must ask that question of the butchers' spokesman in Manchester who gave me this information, and was more vituperative about this Government than I could ever contemplate being.

Mr. Bob Brown (Newcastle-upon-Tyne, West): I am sure that my hon. Friend has no wish to mislead the House. He talks about "the Sunday joint". He must concede that for many families today the Sunday joint is no more than a Sunday chop.

Mr. Kaufman: My hon. Friend is quite right. I do not wish to mislead the House on this point, just as the Minister would not wish to mislead the House about the comments made by butchers in his presence last week, when he endured what Labour Ministers often had to endure and Tory Ministers rarely had to endure, namely, being insulted at a dinner.
I went round my constituency yesterday morning and in one large block of flats in the Longsight area I spoke to many housewives about the cost of living. Their comments about the Prime Minister, even in this permissive age, were almost unprintable. One reason is that there are many low-wage earners in the area, many of whom have children at school and who have been faced with an increase of one-third in the price of school meals. Many people cannot manage to pay this increase, as has been shown by the figures that I have given.
On Saturday night a letter appeared in the Manchester Evening News which put the matter accurately. It said:
Before decimalisation there was frequently sung on the radio a song helping people to count up to in decimals. Somehow the singer did not get round to a second verse telling if a person wished to spend£1 while shopping. better take two.


When in opposition the Prime Minister used to make a great song and dance about two things which would happen if the Labour Party remained in office—one was the disaster of the 10-shilling £ and the other the disaster of 750,000 unemployed. The Labour Government never reached his target of 750,000 unemployed when they were in power, although the Conservative Party has now effortlessly surpassed that target. The 10-shilling £ is obviously the next thing on the list.
This Government and the Prime Minister personally—because of his special offer of last June—have broken the basic promises upon which they were elected to power, and the housewives of Manchester and their husbands will neither forgive them nor forget them.

4.49 p.m.

Dr. Tom Stuttaford: I congratulate my colleague—not my political friend—the hon. Member for Norwich, North (Mr. Wallace) for putting down this Motion and being fortunate in the Ballot. He is a constituency member par excellence. He need not apologise for talking parish pump politics. I am going to do the same. We represent different parts of the same city. The hon. Member put his case very fairly and moderately, and I agreed with what was said about his speech by my hon. Friend the Member for Dorset, South (Mr. Evelyn King) on the question of food prices.
I want to emphasise the East Anglian aspect of the matter and I hope that my right hon. Friend the Minister will refer to it in his reply. This Motion was put put down in order to bring to the attention of the country the plight of East Anglia—an area neglected not only for the last 10 months but ever since the war, by both parties. If we look at the figures of unemployment there—and they are worse than the hon. Member for Norwich, North mentioned—we find how badly they compare with the figures mentioned in the debate on the steel industry last week.
In Yarmouth now there is a male unemployment level of 9·35 per cent.—these are this morning's figures—and in Norwich the figure is 4·2 per cent. The figure for Norwich and the surrounding

countryside is 6·35 per cent. We have not had such figures for some 30 or 40 years. They have not been induced by the present Government during the last few months. We saw these figures coming last summer. Indeed, it is because we saw unemployment coming that we had a change of Government. If East Anglia had not changed its mind about its politics, there would not have been a change of Government at Westminster.

Mr. Wallace: Mr. Wallace indicated dissent.

Dr. Stuttaford: The hon. Member for Norwich, North shakes his head, but he is now the sole survivor of the Socialist majority in that area.

Mr. Wallace: I am intrigued by the arguments by my constituency colleague. He did not fight the election on the Tory Party slogan of "A Better Tomorrow". He fought it on a "Better Next Week." He forgot that tomorrow never comes and that next week is only a few days away.

Dr. Stuttaford: That shows how in East Anglia we realised there would not be a sudden improvement. We did not expect a sudden improvement. That is why I changed my slogan to a "A Better Next Week" from "A Better Tommorow".
If we look at the unemployment figures for East Anglia and then consider the normal wage structure, we see why prices are so damaging to those low income households who cannot afford a rise in the cost of basic commodities. In East Anglia we have a wage structure which is the lowest urban wage structure in the country, and the rural wage structure is one of the lowest if not the lowest. If we add to this factor unemployment, we find that the people who are now unemployed have been able to put no money away and save. Their wages have never allowed saving. This is one of the very good reasons why they are now feeling the effect more than is any other area.
There is another reason why we in East Anglia are suffering. We have never been classified as an intermediate or development area. There can be no other large tract of countryside—far larger than South Dorset—which has these conditions. There is no chance of having intermediate area status. We have appealed time and time again, but


our appeal has always been rejected. This would be fair enough if the Government of the day did not discourage firms from coming to East Anglia. We all know that it is not only a question of granting I.D.C.s, but when a firm seeks advice from the Ministry, it is the nod, the wink and the nudge which determine where that firm may go. We want to see an end to the discouragement to firms moving to East Anglia, and positive encouragement, matching that of the Norwich City Council which is doing so much to attract industry there.
We must have a better infrastructure in the future. In Norfolk we have less dual carriageway than in any other county in the country. We have a road bill a quarter of that of Devon which is similar in size, in rateable value and industry. We have been a neglected area for too long. This is shown in last year's election figures. If we do not change this situation, it may be shown in the election figures five years' hence.
We must, however, look at two factors which have determined some of those conditions over the last few years. First is the regional employment premium. We had an area struggling for existence. We had a hard working, low strike force of workers. This area has had little to do with prosperity partly because of the regional employment premium. Firms in Norfolk have had to compete with firms in other parts of the country, not only with the new factories but with the existing factories.
The other factor is S.E.T. In a city like Norwich surrounded by countryside, one realises that this is a service district and a commercial district in a rural area. Here, S.E.T. bites harder than it has bitten in other places. It has certainly bitten in Norwich. A great deal of unemployment must be attributed to the Socialist policy of the regional employment premium and to S.E.T. If we take away S.E.T. and the regional employment premium, Norwich will pick up, particularly if it is given facilities to do so. If the fact that it has this labouring force which works hard and strikes extremely rarely, and has a work record second to none. It should be brought home to employers who want to move their factories, and if they are encouraged to go to East Anglia rather

than to other areas where they will get grants, but elsewhere, they will not get the same loyalty and hard work as they can get in East Anglia.
I hope that my right hon. Friend the Member for Lowestoft (Mr. Prior) will remember where he was born and will tell us what he intends to do for his home area.

4.56 p.m.

Mr. James Wellbeloved: I want to make a brief intervention., primarily because the question of meat and meat prices has cropped up and, as the House is aware, I have a certain interest in the meat industry. I hasten to add that I have no financial interest. I happen to be the son of a retail butcher and I spent my early youth living above a butcher's shop.
I am indebted to my hon. Friend the Member for Norwich, North (Mr. Wallace) for initiating the debate. Although he dwelt considerably on the problems of development areas, particularly development areas which combine those disadvantages which he mentioned with the disadvantage of low wages, I was mindful of the fact that although I represent an area which could not qualify for development area status, I have in my area a large number of people who are on low incomes and a large number of retired pensioners who are also at an equal disadvantage with my hon. Friend's constituents because of the policies that are being pursued by this Government.
The hon. Member for Norwich, South (Dr. Stuttaford) seemed to indicate that he expected a miracle of conversion from his right hon. Friend the Minister of Agriculture, Fisheries and Food. I can tell the hon. Gentleman, before his right hon. Friend even gets to the Dispatch Box to reply to the debate, that there will be no miracle conversion on the part of the right hon. Gentleman. He is committed to a high price food policy, and nothing will change him from that path. When we come to the Division this evening, I hope the hon. Member for Norwich, South will have the courage, with other hon. Members opposite who share his views, to join my hon. Friend the Member for Norwich, North in the Division Lobby as a protest against the policy that is being pursued by the Government.
The hon. Member for Dorset, South (Mr. Evelyn King) mentioned convenience foods and seemed to imply that because sales of these convenience foods are increasing there was little problem facing the British housewife. I would only say that convenience foods, by and large, are not bought by retired pensioners or by the housewife shopping for a family with a relatively low or even average income. Convenience foods are the kind of commodity which are bought by a young couple who want quick and easy meals which can be prepared with ease before they go out in the evening to enjoy themselves.

Mr. Kaufman: My hon Friend has taken up the point made by the hon. Gentleman the Member for Dorset, South (Mr. Evelyn King) about convenience foods, and he will recall that the hon. Gentleman referred in particular to potato crisps. With the decline in the number able to afford school meals, many children are now being sent to school with potato crisps to eat for lunch instead of the good meal which they could have expected in the past.

Mr. Wellbeloved: My hon. Friend was quite right to deploy his argument about the effect of Tory policy on school children. It is deplorable that one of the consequences of the present Government's policies is that, instead of having wholesome and nutritious school meals, children are now—perhaps, following their natural preference—taking a few pennyworth of sweets or a packet of potato crisps.
My constituents, and, I wager, the constituents of practically all hon. Members, are interested not in convenience foods but in low-price meat—their traditional British diet of a low-price weekend joint and low-price meat, a steak, a chop, or something else, during the week. This traditional diet will be taken from them under the high meat price policy, the meat tax policy, being pursued by the right hon. Member for Lowestoft (Mr. Prior), who is now the Minister of Agriculture, Fisheries and Food.
The hon. Member for Dorset, South told us that this was not the farmers' fault. In fact, the National Farmers' Union has been the most powerful lobby

in this country generally, and especially in relation to Members of Parliament, for a change in our system of low-price meat imports. It has exercised an undue influence on the Government which the Government will come to regret as time goes on and the effects of the National Farmers' Union's success on meat imports becomes better known.
We were indebted to my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) for bringing into the debate the estimates published in The Grocer of food price increases since this miserable Government took office in June last year. There has been a 10 per cent. increase in food prices alone already. It is no wonder, as my hon. Friend the Member for Norwich, North said, that wage earners are putting in claims for higher wages. This is no inflationary situation created out of spite. It is a wage-inflation situation born of sheer necessity, in an effort to obtain incomes with which the ordinary working man can maintain his family.
I come now to the "Prior policy pledge" made by the right hon. Member for Lowestoft not during the election campaign but in a speech in this Chamber on 29th July, 1966. A good many people are under the impression that the Tory Party has only just became converted to a high food price policy. In fact—to be fair to him, he may not have made a great issue of it at the last election—the right hon. Gentleman made his view clear in a quiet and discreet speech in 1966:
The time has come when we should have higher prices for food and no subsidies for either agriculture or the fishing industry. If we did that we should get competition working in both industries and the nation would get better value because the nation has been mollycoddled for too long by receiving cheap food.. A great case could be made out for increasing the price of food…"—[OFFICIAL REPORT, 29th July, 1966 Vol. 732, c. 2127.]
The right hon. Gentleman has made out that case, and he has convinced his colleagues in the Tory Government that the time has come to impose high food prices on the British people. It is no good their praying in aid the movement towards Europe, because their policies, as set out by the right hon. Gentleman, and quite independent of whatever might be going on in the European negotiations, will impose high food prices upon the British people in any event.

Dr. Stuttaford: Prices were rising steeply by June. This is nothing new. There was no sudden change. The graph is fairly straight.

Mr. Wellbeloved: I am delighted that the hon. Gentleman has reminded us of that. It may well be so, but, despite the evidence of worldwide inflationary trends, the Prime Minister promised—as my hon. Friend the Member for Ardwick said, it was his special election offer—that he would halt the rise in food prices at a stroke. Yet we have heard this afternoon that, despite that solemn pledge, which conned many a decent housewife into neglecting her family responsibilities and led her to vote Tory, food prices have risen by 10 per cent.

Mr. Norman Buchan: I wonder what the position might have been if, at the same time as giving a pledge to bring down prices at a stroke, the Prime Minister had promised to appoint as Minister of Food someone who wanted food prices to go up.

Mr. Wellbeloved: I shall let my hon. Friend develop that argument, if he has the good fortune to catch the eye of the Chair later. I am trying to be fair to the Minister, although he has embarked upon and committed himself to a policy of robbing the British public of their traditional low-price food. In the Borough of Bexley—I represent a constituency within the London Borough of Bexley and I am a neighbour of the Prime Minister—we are so concerned about the impact of Tory-imposed food prices and the abolition by this Government of every piece of machinery which was having an influence to stabilise food prices that we have had to set up an organisation called the Bexley Housewives' Protection League. We share the concern of so many other housewives at the terrible task which now confronts them when they go shopping in the high street.

Mr. Peter Mills: I am interested to hear about that organisation. I wonder whether I might be invited to speak to it at some time.

Mr. Wellbeloved: I imagine that the Bexley Housewives' Protection League would be prepared to invite the hon. Gentleman along at some time in the future, although our members would be

in some difficulty in knowing whether they were inviting the hon. Gentleman as the Member for Torrington or as the spokesman for the milk lobby. The hon. Gentleman can choose which capacity he prefers. In due course, when the Bexley Housewives' Protection League has dealt with the real problems which confront it and wishes to turn to a little light relief, I shall commend the hon. Gentleman's name to it.
Now, a word about meat imports. There has been a conspiracy, a conspiracy to which the Minister of Food has been party, pursued by the National Farmers' Union. It started with that great publicity campaign which surrounded us when we were trying to deal with the problems of foot-and-mouth diseases which were reviewed by the Northumberland Committee. The farmers were delighted with the opportunity quite irresponsibly to attack our traditional suppliers of low-price meat. How they relished the thought that they might be able to persuade the Government to ban imports of low-price meat. For the farmers of Britain work on a mistaken basis, believing that, if they can stop low-price meat imports, the market will stay the same, or may even enlarge, and the total market for them will increase.

Mr. Peter Mills: It was the hon. Gentleman's Government who did it.

Mr. Wellbeloved: I have an idea that the Minister of Food is about to intervene and say that it was my Government who did it. He will recall that I was just as vigorous against my right hon. Friend who was then Minister of Food for following that mistaken policy.

Mr. Prior: The hon. Gentleman can hardly call it a conspiracy between me and the butchers.

Mr. Welbeloved: The right hon. Gentleman was a party to the conspiracy, and his attitude was apparent at the time. I was about to deal with the second leg of the conspiracy, for which the right hon. Gentleman is entirely responsible, namely, the conspiracy to introduce a meat tax for the first time in our history, a tax on one of the staple items of the British citizen's diet. It is a disgrace that for the first time in our history we are faced with the imposition of a tax on the traditional British food—beef, lamb and


all the other delicate and delicious meats that go to make up our staple diet.
The Minister made the objective of the levy quite clear to the New Zealand Minister of Overseas Trade, the right hon. J. R. Marshall, recently. The New Zealand High Commission News Bulletin wrote that the Minister made it quite clear that the British Government's objective in introducing the levy scheme was
to increase consumer prices in Britain.
—that is, to increase the price of meat.
The effect of the Government's policy on meat will not be to increase the British farmers' share of an expanding market. Because of the disgraceful increase in basic meat prices, the United Kingdom's total meat consumption will decline. Many people who require low-priced meat will find that it is impossible to obtain it, because retail butchers will have no alternative but to increase prices. As my hon. Friend the Member for Ardwick mentioned, it was estimated in the confrontation between the Minister and the butchers that as a result of the levy meat prices would increase by 20 per cent. and might well go up by 30 per cent.
Because of the Government's activities, the ordinary housewife, the ordinary meat consumer, faces even greater difficulties. I hope that in replying to the debate the Minister will tell the British housewife clearly by how much he expects the price of meat per pound to increase as a result of his levy. Let the Government's estimate of meat prices be on the record now.
While he is coming clean and giving the housewives the facts, will the right hon. Gentleman also tell the House and the country by how much he expects the retail price index to decrease over the next 12 months as a result of the reduction in selective employment tax? Let us have a figure. When they were in Opposition, the Tories were always prepared to put a figure on this, that and the other in relation to the then Government's policy. Let us have a figure for the cost to the British housewife of the right hon. Gentleman's dear meat policy and for the reduction because of the reduction of S.E.T.

5.13 p.m.

Mr. Peter Mills: I welcome the debate and congratulate the

hon. Member for Norwich, North (Mr. Wallace) on bringing its subject matter to the attention of the House. It is a long time since our last debate on food.
I also congratulate the hon. Gentleman on the fair and honest way in which he presented the facts. Regrettably, the hon. Member for Manchester, Ardwick (Mr. Kaufman) has left the Chamber, but I would say exactly the same about him if he were here. His speech was very different from that of the hon. Member for Norwich, North. His alleged facts were not right, and it was a patently dishonest speech. His attitude will not help solve the problem we face. If the hon. Gentleman wants to make an impression here and to win an argument, that is not the sort of speech to make. Even though I disagree with a number of other hon. Members present, I know that they are honest and present the facts fairly.

Mr. Buchan: In fairness to my hon. Friend the Member for Ardwick, may I point out that his whole speech hinged on the speech of the present Prime Minister on 16th June last year. If the hon. Gentleman is challenging the factual basis of my hon. Friend's speech, he is challenging the promises in the Prime Minister's speech.

Mr. Mills: I do not disagree that the hon. Member has every right to attack us and to attack my right hon. Friend the Prime Minister. But the hon. Member for Ardwick is not like the hon. Member for Renfrew, West (Mr. Buchan), who is my pair, and who usually presents the case fairly and correctly, and the hon. Member for Norwich, North, who also usually speaks in a correct, honest way.
There are very few hon. Members present, probably for the simple reason that the film "Growing Up" is to be shown in a few minutes. That may well be why the hon. Member for Ardwick has left the Chamber. One thing that is essential to growing up to good food.

Mr. Buchan: Including milk?

Mr. Mills: I am coming to that. The children of our land get very good food. They are well looked after, and the protein level of their diet is high.
I disagree with my party and my Government on milk. The Government have made a mistake here, because it is important to give young children milk so that they grow up with all the goodness that milk provides. On the whole our children are well fed. As a nation, we are well fed with a wide variety of food, and we have a service that is probably the best in the world.
It is no use denying that food prices have gone up in recent years. They have gone up fairly rapidly recently, and they went up under the previous Administration. I shall come to some of the reasons why. But wages went up by 13 per cent. last year while the cost of living rose by 7 per cent., so most people have been covered for the increase in the cost of food and the cost of living. Those who are suffering are the pensioners and the elderly, and it is the Government's duty to watch their position very carefully. The Government have done something about the matter. But it is still those on fixed incomes who are finding it extremely difficult to cope with the increased cost of living, including the increased cost of food.
Everything else goes up without much comment, while most of us bitterly resent an increase in the price of food. We have had a cheap food policy for a very long time, and we do not like to see the price of food going up But I sometimes wonder whether we could not complain a little more bitterly about the increased cost of everything else, such as television sets, whisky and beer. We get very emotionally involved when we talk about an increase in the price of food.

Mr. Wallace: For the average small family with a fairly low income, food is the most vital thing; it is the housewife's main concern. That is why people concentrate on an increase in food prices more than on anything else.

Mr. Mills: I agree, but other things go up fairly rapidly in the household budget. All I am saying is that it seems to me that we do not like to pay a fair price for our food. But I will come back to that in a moment. Our food prices compared with those of other countries are reasonable, and that point should not be overlooked.
The first and most important reason for the increased cost of food is the in-

creased cost of raw materials. One sees this reflected in the world prices of cereals. Every cereal commodity has gone up—maize, hard wheat and the rest. The rise in prices last year was triggered off by the 10 per cent. reduction in the American maize crop. The price has gone up by £8 or £9 a ton—and if a Socialist Government had been in power, exactly the same thing would have happened. This rise in cost affects the rearing of every animal which uses cereals. The whole cost of production has risen dramatically. One cannot get away from that.
Butter is another good example. Its price has risen substantially for a variety of reasons. For example, there has been drought in Australia and New Zealand, whose butter production has fallen as a result. On the Continent, a number of producers have gone out of butter manufacture because of the poor prices they have been receiving for milk used in butter making. On 5th May, the Financial Times pointed out that even in the E.E.C. many people have gone out of milk production because butter prices have been so low that it was not worth their while. The result is that butter prices have been rising. We in this country, whether under a Socialist or under a Conservative Government, cannot be isolated from the effects of these world price rises of raw materials. They have had a dramatic effect upon us in the last year or so.

Mr. Cledwyn Hughes: The hon. Gentleman is making a reasonable case. The only difference between the situation as it is today and the situation as it was when we were in office is that the hon. Gentleman made very different speeches then.

Mr. Mills: With great respect, I do not think that I did. Indeed, I am coming to something which backs up what I have said in years gone by.
One of the important aspects of the situation, and the reason we are in it, is that good housekeeping demands that this country should produce enough to fill its larders. No doubt the right hon. Member for Anglesey (Mr. Cledwyn Hughes) would have been doing exactly the same thing as my right hon. Friend the Minister of Agriculture had he still been in office—he would have been searching far


and wide to find enough butter to fill our larders. One of my criticisms of the right hon. Gentleman as Minister was that he did not foresee that this situation was coming and did not encourage British agriculture further. Had he done so, the situation would not have developed as far as it has. Butter is a typical example. Good housekeeping demanded home production high enough to cope with the situation which has arisen—drought in Australia and New Zealand and reduction in European butter production.
The right hon. Gentleman should have seen to it that home producers were encouraged to feed the nation. Good housekeeping demands that even in this country a small surplus should be provided each year to see that we meet difficulties like this. I see that the right hon. Gentleman shakes his head, but this is the same sort of speech that I made when I was in Opposition.
Is it fair to go on producing a commodity at below cost? For years, New Zealand has provided butter to this country at virtually below the cost of production. If hon. Members disagree with me, they have only to read the Financial Times of 5th May, which put the case far better than I can. It is not fair to continue this situation. If we want a good supply of butter, we must pay a fair price for it.
The second main reason for the increase in the cost of food is legislation. It is easy for this House to pass legislation and forget its effects. The effects of legislation on the cost of living can be fairly steep sometimes. The Transport Act added at least another 14 per cent. to transport costs, and this is reflected in the cost of living. Selective employment tax, the responsibility of the Labour Government, added another £85 million. I see that hon. Members opposite are still deserting the Chamber to see "Growing Up". It is obvious where they are going but will continue my speech despite that.
Fuel costs are another factor. The price of crude oil from abroad has gone up considerably. Then there are licences and the drivers' wages. Yet other factors which have led to an increased cost of food are meat inspection and meat levies. North Devon Meat, the company in which I am interested, last year paid £12,000 in meat levies and £14,000 for meat inspection. That is a heavy burden

for one company to bear and it has to be reflected in the cost of meat. Someone has to pay for it.
It is easy for this House to pass legislation but in the long run much of that legislation means an increase in the cost of food. My right hon. Friend should look closely at the Socialist legislation of the last six years to see where he can prune some of the costs—for example, the Transport Act, meat inspection, meat levies and so on. He should prune unnecessary provisions.

Mr. John Golding: rose—

Mr. Mills: No, I will not give way. It is easy for hon. Members opposite to criticise us, but they have a heavy responsibility for legislation and taxation which have put up the cost of food. They cannot get out of it.
The third main reason for the increased cost of food is the development of convenience foods. I am not against them. Modern housewives naturally want to use them. One's wife says that she has not the time to prepare a lot of the food. I believe that convenience foods are here to stay. Very well, then! The housewives and the community have to pay for them. The figures are staggering. A ton of potatoes costs £23 to £24 and the cost to the housewife may be about £35 a ton in the normal way. But if that ton of potatoes is prepared as frozen chips, the cost rises to the tremendous level of over £200 a ton. If the housewife wants to buy frozen chips for the sake of convenience, that is fair enough, but it makes an increase in the cost of food. We cannot have it both ways.
The fourth reason for the increase in the cost of food is the tendency for housewives to want better cuts. Any butcher will say that one of the problems today is that housewives want chops, or parts of legs, and not the cheaper cuts of meat. Any farmer today could quickly make a fortune if he were able to produce a pig or a sheep like a centipede, for the more legs of meat a butcher has to sell, the more profit there is for both the butcher and the farmer. But the effect is that the butcher has to put up the price of other joints to cover the meat not bought by the housewife. That is an important, although not the only, factor in the reason why meat is so dear.
The fifth reason—and here I must declare an interest as a farmer—is the policy of giving British agriculture a fair return for its labour. This is absolutely right. It is in the interests of the consumer and the country as a whole, and it is a change from the policy of the Labour Government. If we allow British agriculture to slip back, we shall be in danger of paying considerably more for our food. With a healthy, prosperous and viable agriculture, we can produce the food the country requires. We can deal with problems of droughts all over the world and with the occasional failure of imports.
As I have said, good housekeeping should budget for a small surplus to cover problems of this sort. That means giving British farmers a fair end price. Most reasonable people would agree with that, Of course British agriculture helps the balance of payments and so on, but I am concerned about it mainly because, if British agriculture is neglected, we shall be subject to all the problems associated with importing food, and we could be held to ransom by the countries from which we import. In the interests of the consumer and the nation as a whole, it is important that we have a healthily strong British agriculture to keep our larder filled.

Dr. Stuttaford: Does not my hon. Friend agree that cities such as Norwich, represented partly by the hon. Member who moved the Motion, are extremely dependent on a healthy agriculture, not least as a service centre for agriculture?

Mr. Mills: I agree. Most towns in the counties service agriculture and are very much dependent upon a profitable agriculture. That is why I welcome the debate. Unemployment does not help British agriculture. The more unemployed there are, the fewer people who will be able to buy all the pleasant things which British agriculture produces—butter, eggs, cream and so on. Unemployment does not help British agriculture, or cities like Norwich and the towns in the South-West. There are problems in the rural areas and one of the ways in which to help is to have a profitable and viable agriculture.
I repeat, good housekeeping, with all that that means, demands that we have an agriculture which is profitable and

viable, I am very concerned that we should be down to two or three weeks' butter supply. That is not good housekeeping but a reflection on the right hon. Member for Anglesey, because if British agriculture had produced more during his administration, we should not now be in this position.

Mr. Cledwyn Hughes: The hon. Gentleman is being unfair to me and unfair to himself by producing such an appallingly bad argument. He knows that throughout my period at the Ministry of Agriculture butter stocks were at a very high level and that one of my problems was that butter stocks virtually doubled in that period. At that time, he was in opposition shouting the very opposite of what he is now saying. For a fair-minded hon. Member whom I respect, he is being grossly unfair, for it is difficult in a debate of this length to go into detail. He must do his homework before he says these things.

Mr. Mills: The right hon. Gentleman is quite wrong. I have not changed my course at all. If he wants more detail, I am prepared to give it. Towards the end of his administration, agriculture lost confidence and production fell.

Mr. Hughes: Mr. Hughes indicated dissent.

Mr. Mills: It is no good the right hon. Gentleman shaking his head.

Mr. Hughes: I apologise for intervening again in the hon. Gentleman's speech. If he reads his right hon. Friend's Price Review White Paper, he will see that it says that production was going up in all the major sectors. If there were a decline, it was for the reasons the hon. Gentleman has given, namely, bad weather, drought and so on. He knows these things perfectly well.

Mr. Mills: No. At the recent meat traders' dinner, which has been quoted, it was said that we were producing less meat now than in years gone by.

Mr. Hughes: Would the hon. Gentleman allow me?

Mr. Mills: No.

Mr. Hughes: Would the hon. Gentleman allow me?

Mr. Mills: If the right hon. Gentleman will allow me to finish what I am saying, I will give way.

Mr. Hughes: I am obliged.

Mr. Mills: Of course I will. What I am saying—and the right hon. Gentleman cannot dispute this—is that British agriculture lost confidence over the last two or three years. It has taken this Price Review—I do not know whether it has done the trick—to start to get that confidence again. I have constantly said, even in this debate, that good housekeeping demands that we have a small surplus and if the right hon. Gentleman's Administration had arranged that, we should not be in our present position.

Mr. Hughes: May I correct the hon. Gentleman? Paragraph 31 of Command 4623, Annual Review and Determination of Guarantees, introduced by his right hon. Friend, says:
Between June, 1969 and June, 1970 the beef herd expanded more than in any previous year.

Mr. Mills: Whatever the right hon. Gentleman says, we are not producing as much beef as we did. The herd may have expanded, but we are not now producing what we once did. If agriculture had not lost confidence, it would have expanded even faster to meet the sort of situation which we now face.

Mr. Hughes: It says
more than in any previous year".

Mr. Mills: If the right hon. Gentleman is right, it seems strange that the confidence which almost completely disappeared under the last Administration should now be starting to return. I believe that we shall see production rising.
What I am saying applies as much to my right hon. Friend as to the previous Minister of Agriculture—the lesson must be learned that it is right to ensure that British agriculture flourishes enough to produce enough to cover all eventualities, including shortages of supplies from abroad.
I have spoken for a long time, but I have been provoked. I would like to see us producing good food at a fair price and I hope that in future we shall not rely upon imports to anything like

the degree we have done. The Opposition bear a heavy responsibility, through legislation and increased taxation imposed when they were in Government, for the rise in the cost of food. Whatever Government is in power, the world rise in the price of raw materials has had a dramatic effect on the cost of food. A Minister of Agriculture would be very wise to learn lessons from the past. It would be wise and good housekeeping to see that we have a small surplus to deal with problems. This would be of benefit to housewives and the farmer.

5.42 p.m.

Mr. John Golding: In the past Parliament I made my maiden speech on the subject of low-paid areas. At that time the Local Employment Act was going through the House and hon. Members on all sides representing lower-paid areas discussed their problems. At that time we were assisted by Mr. Derek Page, who then represented King's Lynn. It seems that the problem of low pay has disappeared from King's Lynn as there is no representative from that area present today.
This is a continuing problem which is unfortunately getting worse. This is happening in two respects. It is getting worse because of the Government's wages policy. The problem with the low-wage earners is the problem of the differential between those areas of low nay and the richer industrial areas—those with economic strength who can obtain considerable wage increases. It seems to be the policy of the Government to try to hold back the public sector, the badly organised, those in traditional industries. My hon. Friends from the North Staffordshire area and myself see this problem increasing as one moves further away from the more prosperous area of the West Midlands.
My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) recently published an article on potters' pay showing the way in which pottery workers were now lagging behind the average of other industrial workers. Everyone knows of the plight of the mineworkers and of the problems of the agricultural workers. In North Staffordshire we have pottery workers, miners and agricultural workers as well as public service workers, and we realise that the wage freeze is hitting


them very hard. We feel very resentful that this problem is worsening.
In another respect the problem of the lower-paid is deteriorating. When I spoke in November, 1969, I saw as a saving grace the fact that we did not have a high level of unemployment. I was able to say, as were Members from East Anglia, that although we had the problem of low pay, industrial and agricultural inertia, at least we were not cursed with the problem of unemployment. We cannot say that now. We now have this problem added to the earlier problem of the low-paid. It worries all of us very much that we see the unemployment figures for the disabled, school-leavers, the young and the over-40s rising.

Dr. Stuttaford: is the hon. Gentleman aware that in Norwich anyway there was considerable unemployment under the Labour Government, particularly associated wih tthe boot and shoe industry and that parts of the North Norfolk coast had levels of around 5 per cent. to 6 per cent. a year or two ago?

Mr. Golding: I am cautious about speaking of the problems of East Anglia, but I do know that never have the levels been so high as they are now. While there may have been difficulties in particular industries due to transition, perhaps to the introduction of new materials or new processes, never since the beginning of the Second World War have we seen such levels of unemployment.
These two problems of unemployment and low pay have crystallised. There is the third problem of rising prices, particularly in the price of basic essentials such as food and rent. These play a large part in the budgets of the lower-paid and an increase in the price of food, rent or bus fares hits the lower paid disproportionately hard. We find that these increases are making life difficult for the lower-paid.
It is not as if in the lower-paid areas the food cost any less. In 1969 I made a comparison between prices in a supermarket in Ealing and a supermarket in Newcastle-under-Lyme, my prospective consitutency. I found that there was little difference between the cost of food in Newcastle and in London. Indeed, it was more expensive in Newcastle-under-Lyme. Later a national survey confirmed

my findings. Because of the distance from markets, the cost of transport and the system of distribution whereby we bring meat from Aberdeen then ship it back to Aberdeen via London, in many of the lower paid areas, the cost of food is higher than in the industrial conurbations. This is certainly true in many areas of Scotland, where the price of food is far higher than it is in the industrial cities and the South of England. We have increased costs, to some extent stabilised wages, and the threat of unemployment.
We can be critical not just because the Government have failed to control price and wages rises. It is their deliberate policy to have high council rents and high food prices. They cannot have it both ways. They cannot tell us about the advantages that they have given the farmers in terms of income or address themselves to the middle-class taxpayer in terms of tax reductions and ignore the fact that these benefits have been obtained at the expense of the housewife in the price which she has to pay for food. It is the lower-paid workers' wives who are paying the bill for the Tory concessions in taxation and the increased incomes for the farmers.

Mr. Peter Mills: Mr. Peter Mills Indicated dissent.

Mr. Golding: The hon. Gentleman shakes his head. But he must realise that the money has to come from somewhere, and it has come from the purse of the lower-paid workers' wives.
The situation is grim. Our whole social pattern is changing. There has been reference to the dramatic increases in meat prices. I do not know whether the increase has been 24 or 30 per cent. But when we were talking about a scarcity due to the foot and mouth outbreak people put up their hands in horror because the price of beef was up to 9s. Yet today one cannot buy best beef for 10s. a lb. To echo Marie Antoinette, right hon. and hon. Members opposite would say, "Let them eat scrag end". They are disturbed that the housewife should want best quality meat, but this is what she has come to expect in the last few years.
It is wrong for the Government consciously to pursue a policy which means for most working class families that they are not able to eat meat in the week. In view of the price of lamb, pork and


beef this weekend, manual workers' families cannot afford to buy meat in the week.

Mr. Peter Mills: Nonsense.

Mr. Golding: The hon. Gentleman says "Nonsense".

Mr. Mills: Of course it is.

Mr. Golding: I do not know what experience the hon. Gentleman has of keeping a family on a manual worker's wage. I do not know whether he goes shopping on Monday morning with money from the wage of a manual worker. The wife of a miner who works on the surface in my constituency will be lucky. to receive £15 on a Friday if her husband gives her his entire wage packet.

Mr. Mills: Some do not get that.

Mr. Golding: The hon. Gentleman says that his wife does not receive £15 a week—

Mr. Mills: No, I do not.

Mr. Golding: —to maintain the household and to pay for rent, clothes and holidays. I hope that someone will institute an inquiry into the hon. Gentleman's living conditions. I should be very surprised if there were any hon. Member whose family was living on £15 a week.

Mr. Mills: The hon. Gentleman referred to the wife of a miner.

Mr. Golding: I said that if the husband handed his entire wage packet to his wife she would have only £15 out of which to pay for rent, clothe the children, feed the family, pay for school meals and perhaps to put aside something for holidays. If the family have a car—and I will not ask whether hon. Gentlemen opposite have cars—they will have to find the cost of running it.
I have referred to right hon. and hon. Members opposite saying, "Let them eat scrag end". Perhaps the Minister the right hon. Member for Lowestoft (Mr. Prior) would say, "Let them eat fish". He would at least then be doing a service to his constituents, because that is what is likely to happen in the very near future.

Mr. Robert Hughes: Does my hon. Friend agree that if the Minister were to say that it would be far more relevant than when he said, "Let them eat peaches instead of oranges"? [Interruption.]

Mr. Thomas Swain: On a point of order. When the Chamber is almost empty, obviously because a film is being shown elsewhere in the precincts, is it usual for an hon. Member to keep up a running commentary throughout another Member's speech.

The Deputy Speaker (Miss Harvie Anderson): That might be a matter for the Chair, but not in the way that the hon. Gentleman represents it.

Mr. Golding: The latter-day Marie Antoinette might say, not, "Let them eat fish or peaches", but "Let them eat pigeons". This is the mentality of the Government.
The £, which was worth a £ in June, 1970, is now worth only 94p. The Government must realise that their prices policy is proving disastrous for low-wage earners. Their employment policy is producing very great problems in the areas of low-wage earners. Their wages policy is creating even greater difficulties for working class families in those areas. In speaking for North Staffordshire, I associate myself with the sentiments expressed on behalf of East Anglia.

5.59 p.m.

Mr. J. R. Kinsey: In addressing the House on this most important issue I should like to take up some of the points made by the hon. Member for Manchester, Ardwick (Mr. Kaufman). I am sorry that he has left the Chamber, but I am not going to attack him; rather, I am going to thank him for making some of the points he did about the increase in prices since the present Government came to office and relating those increases to those for coal, gas, electricity, steel, and the Post Office.
Those increases were in the pipeline before the previous Government left office. Certainly the Post Office increases were. Those increases must bear heavily on the shoulders of the party opposite. This Government actually reduced to the consumer the oncost of steel and coal prices, and did so against the Opposition's


wishes, particularly over the steel prices. We have just reduced the prospective increase of 14 per cent, to 7 per cent., as we heard at Question Time today.

Mr. Alexander Wilson: Is the hon. Member suggesting that the price of coal has been reduced since Tory Government came into power?

Mr. Kinsey: The price of a coal increase which was in the pipeline when the last Government left office. I wish the hon. Gentleman would allow me to continue my speech. I have only just started. The cost as it was in the pipeline has been reduced to the consumer and by this Government.
In steel, we have reduced the increase from 14 per cent, to 7 per cent., and yet we heard cries from the Opposition to put on the full increase of 14 per cent. These costs are basic and have consequences across the whole spectrum of the cost of living. These are what are called basic industries.
I am grateful to the hon. Member for Norwich, North (Mr. Wallace) for initiating this debate today, because the cost of living is a major problem not only to the housewives on the lower income scales but all the housewives throughout Britain, who all have to cope from day to day with what is a worrying, wearing problem. It is a terrible time they are going through, to make the housekeeping money stretch from one week's end to the next, and it is that with which the Government are concerned. The housewives do not want to hear who caused the problem. What they want to know is, who is going to cure it. It is necessary to understand the problem before we can cure it. From the benches on this side of the House we have heard today, from my hon. Friend the Member for Dorset, South (Mr. Evelyn King), my hon. Friend the Member for Torrington (Mr. Peter Mills), my hon. Friend the Member for Norwich, South (Dr. Stuttaford), constructive criticisms and ideas of how to tackle the problem and the ways in which the Government can get their shoulders to the wheel.
A reliable guide to the way the cost of living has been moving comes from a paper published by the C.S.O. on 26th

March, 1971, about the consumer index and the purchasing power of the £. I refer in particular to Appendix A of that publication. We can see how pre-war the cost of living went. There was practically stability after 1921; and there was an actual reduction. Older housewives who had that experience of shopping then can remember it and compare it with the problem they are having to face today.

Mr. Swain: Will the hon. Member give way?

Mr. Kinsey: I will not give way, for I have not much time and I have a lot to say.
Since 1945 we have seen the inflationary trend. It is a matter of history. The record is remarkable. Under the Socialist Governments, between 1945 and 1951, the increase on average per year in the cost of living index was four points. From 1951 to 1964, under a Conservative Government, the average increase was two points per year. The Socialist record, when the Socialists came back into office again, from 1964 to 1970, was an average increase in the cost of living of five points a year.
The record is more remarkable still when we consider the highest and lowest points of the increases. The two highest points of increase during the Conservative Government were in 1956 and 1962. In each year it was 3·6 points. The two lowest points of increase were in 1959 and 1960 and were 0·6 and 0·9. We go back to the Socialists again. Under the Socialists the two highest points were in 1951 when the increase was six points and in 1969 when there was a 6·4 increase in the cost of living. The lowest increase they had in any one year was in 1949, when it was 1·5.
One lesson we can learn from this is that the Conservatives are better managers than the Socialists. Another lesson we can draw is that the highest increases came from devaluation. That must never be forgotten. That is an important factor. Whatever we have gained on the economic side we have lost in the cost of living battle, and it is the housewives who are having to pay for it, as we said they would. All this reveals completely the inability of the Socialist Government of that day to


manage our affairs. The Socialist failure was stark and expensive.
What other factors affect the cost of living? There is consumer supply and demand, which is vital in the ever-present equation we must make in estimating the increase in the cost of living. I have every sympathy with the consumers, and we on this side of the House work for them. We do not batten down on them by supporting every demand for increases which go against them. Overhead costs have gone up—in wages, taxes, transport, and rents. If we examine these in detail we shall see some of the answers to help us solve the problem before us. As for the supply-demand position, shortages distort natural rulings.
There are related factors in nature itself, and some of them are difficult to overcome, as we have had explained to us from both sides of the House, and in the speech of the hon. Member for New-castle-under-Lyme (Mr. Golding), who referred to foot-and-mouth disease. That has contributed very much to the shortage of meat. Another factor is the drought in New Zealand. That affected milk supply; it affected butter supplies; we were having a shortage there. The supply position in meat was affected also by foot-and-mouth in the Argentine and we had shortages there. Another factor is fowl pest. The poultry farmers have provided a source of cheap meat and that has been under threat from fowl pest. Research can make a difference to all this, but research takes time.
Of course, when supplies are plentiful, that brings down costs, and we see that particularly in the supply of fresh vegetables. The cost of living index shows that vegetables became cheaper and the index lost points on that account. That helped the housewives considerably. The farmer really is the city housewives' friend, and ought to be encouraged. There was point in what my hon. Friend the Member for Torrington said.
What we want to see is where, in the system itself, we can so operate as to get the greatest results. Is it doing the job? Is it getting food to the housewife at the cheapest possible price? Any doubts that we may have had should have been dispelled by the National Board for Prices and Incomes Report on Food Distribution, Prices, Costs and Profits, which con-

tains a mass of detail about the price margins on which various section of the trade operate. For example, the average wholesale grocer operates on a net profit margin of between 1 and 2 per cent. In the case of retail grocers, before tax and interest, the average margin in turnover is between 2·2 per cent, and 2·5 per cent. That of wholesale greengrocers is 1·2 per cent., and lower. That of butchers in the wholesale trade is 1·3 per cent. It is almost impossible to work on lower margins than that, yet the object is to reduce margins ever further. That shows that the policy of this Government is right. The Conservatie Party trusts and has confidence in our traders and distributors. It is a policy worth supporting.
The business man is anxious to secure the lowest price for his customer. He is motivated by the desire to serve the shop customer and he offers his goods at the lowest possible prices. There cannot be much wrong with a system which keeps a constant look-out for ways in which to reduce costs and rely on efficiency to beat the competition. That is what the trader is out to do. There is no need for the Government to interfere in such a system, as the previous Government did. The Labour Government were wrong in what they tried to do. All that they did was to increase costs, as the cost of living index proves. In fact, the Socialist record in government from 1945–1951 and from 1964 to 1970 gave the economy thrombosis. The medical definition of "thrombosis" is "A collection of bloody clots interfering with the smooth flow of the stream" That is exactly what happened. The National Board for Prices and Incomes merely held up price reductions without reducing prices.
The effect of wages on prices is most important, though not so much the wages of the trade. The retail and distributive trades admit that their wages are lower than those in other trades. However, they must be taken into account, because they are considerable. In the wholesale grocery trade, they account for between half and two-thirds of the costs, as the Report of the National Board for Prices and Incomes shows. In the case of retail grocers, wages account for 43 per cent, of the costs. In the case of butchers in the retail trade, wages represent two-thirds of the costs. All the way through, wages are most important.
We must be mindful, too, of the pressures put on the trade by wage increases outside the trade. It took the Leader of the Opposition five years to discover the equation that wage increases are price increases. Having lost office, the right hon. Gentleman forgot it within a few months. When he was Prime Minister, he insisted on wage rises of between 2½ and 4 per cent. For the right hon. Gentleman and his supporters today, the sky is the limit. Right hon. and hon. Gentlemen opposite act as though they were the Government who never were. It would have been better if they had never been, in which event the British housewife would not have had to endure the absolute rise in the cost of living which the policies of right hon. and hon. Gentlemen opposite began, for which they set the pace, and from which we still suffer.

6.15 p.m.

Mr. Michael Barnes: I begin by adding to the congratulations which have come from both sides of the House to my hon. Friend the Member for Norwich, North (Mr. Wallace), not only for his Motion but for the way in which he moved it and for the very close knowledge that he has revealed of the problems confronting his constituents. Increased prices of our basic foods affect not only low-income families but all sections of the community. However, my hon. Friend was right to draw our attention to the problems of low-income families, and there are many such families in that part of the country which my hon. Friend represents.
Even before the present inflationary spiral took hold, the core of our poverty problem was not so much among the unemployed as among low-income families where the breadwinners were in fulltime work. Today, many such families are faced with the threat of unemployment which, with the sharp increases in food prices which have occurred, means that very many of them are hard hit.
Another group of people to whom reference has been made is that of retired people. It is heartbreaking to hear from elderly people in one's constituency the complaint, "Cannot you people at Westminster do something about prices?" I have even heard elderly people say that they would prefer to do without the £1 increase in the old-age pension which is to

come if it meant that prices would remain stable. Until the increase in the pension is paid in the autumn, pensioners will be worse off than at any time since the situation which existed before the Labour Government increased the old-age pension in 1965. When the increase is paid, pensioners will be a little better off. How long they will remain better off depends on how soon the Government tackle the problem of increased prices.
We on this side of the House feel that the Minister is far too complacent about the problem. He tends to minimise the true facts of the situation. I remember how he caused quite a stir last November when he replied to a Question from one of my hon. Friends asking how much food prices had gone up since last June, and said that food prices were 1 per cent, down since June, 1970. Of course, it had been the experience of housewives throughout the country that many food prices had risen very sharply. In referring to a 1 per cent, reduction in food prices, the right hon. Gentleman was taking all foods at a time when seasonal items were showing a marked drop. But during the same period, there were sharp increases in non-seasonal, packaged, processed foods, which form the bulk of the food purchases of most families.
The other mistake that the Minister makes when he considers food prices is to take too simple a view of the problem. I think that he says that, despite the policies of the Labour Government, prices rose during the time that the Labour Party was in office. In fact, prices rose at nothing like the rate that we see today. We have had references in the debate to the fact that retail food prices are 10 per cent, up on what they were 12 months ago. The Minister, when quoting what happened to prices when the Labour Government were in power, mentions only the last two years. He mentions the increase from June, 1968, to June, 1969, and from June, 1969, to June, 1970, when the increases were 7·4 per cent, and 6·2 per cent, respectively. But he does not mention previous years, going back to June, 1965, for which the figures are 1·9 per cent., 2·9, 5·2 and 3·1 per cent.

Mr. Kaufman: There is further reinforcement to my hon. Friend in an


answer which I received from the Minister of State to the Treasury recently, which shows that between devaluation and the fall of the Labour Government the purchasing power of the pound fell by 13p, but that since that time the purchasing power of the pound has fallen by 5p—that is to say, at a considerably faster rate since this Government came into power.

Mr. Barnes: I am grateful to my hon. Friend for pointing that out. The Minister is saying that, because of the rises which took place when Labour were in power, although they are far smaller than the rate at which prices are increasing now, we must have no prices and incomes policy, no early warning system, and apparently we do not even need any system of consumer protection, since the Consumer Council can be abolished. The Minister argues that all that is necessary is to reduce the level of wage settlements and to have competition.
His policy was expressed in the newspaper interview referred to by my hon. Friend the Member for Norwich, North:
Mr. Prior is relying on two things to break the spiral of rocketing prices: bringing down the level of wage settlements, which he described as the 'root cause'; and encouraging competition between shops, producers and manufacturers. He told me that he is confident that these policies will pay off in the long run—but the big question he left unanswered was how long we must expect that run to last before the pay-off.
May we be given more information as to how long it will be before that pay-off comes? I do not believe the right hon. Gentleman can give us that information.
The right hon. Gentleman's whole philosophy on food prices is too naive to admit of a solution. I use the word "philosophy", because it is a word of which the right hon. Gentleman is fond. Of all Ministers in Government, after the Prime Minister's speech at Blackpool at the Conservative Party conference, when he launched the so-called new radical. Conservative philosophy, the right hon. Gentleman was the quickest to take his cue from that. Since then we have had many references in his speeches, answers to Questions and even in White Papers to the "Government's philosophy". It is very nice to have a philosopher farmer for a Minister of Agriculture. It is a mixture in a politician of which Plato

would have approved, but I doubt whether Plato would have given the right hon. Gentleman very high marks for his philosophy.
The Minister enunciated his "philosophy" in an answer to a written Question on 8th December, 1970,
I am confident that where there is competition there will no unnecessary or unjustified price increases."—[OFFICIAL REPORT, 8th December, 1970; Vol. 808, c. 59.]
But consumers are not interested in whether price increases are unnecessary or unjustified. Consumers are interested in whether price increases happen and how much they are. In stating that principle, the Minister is stating no more than a syllogism because, by his definition, where there is competition any increase that takes place must be necessary or justified in the perfect Tory world. I do not believe that to be a view which many people in the country would accept. It is far too simple.
Of all issues which were before the country at the last General Election, prices, and especially food prices, was the most crucial. Two days before polling day the Prime Minister made the statement in which he listed measures which would "at a stroke" reduce the rise in prices. It is a phrase which has been quoted many times since then. The phrase was put to the Minister of Agriculture on 17th November, when he reaffirmed that the Government would honour their election pledges. But what we want to know today is when and how that crucial pledge about food prices will be honoured.
The Government have now been in power for nearly a year. Retail food prices are now running at a rate 10 per cent, higher than they were this time last year. It has been clear to many of us on this side, for a long time, that this was the way that things were developing, but the Minister has tended to close his eyes to this situation and to hope that it would not happen. When questioned about the rate of price increases during the calendar year 1970, during which year food prices went up by something like 9 per cent., the answer we got was that most of the increases were during the first part of the year when Labour was in power. We are now approaching the first full year of Conservative Government and when it becomes known the


amount by which food prices will have gone up in the shops during that year will be in the region of 10 per cent. When the Prime Minister used the phrase "at a stroke" last June, and made the statement he did, people took it to mean that there would be direct action on prices. They did not think it was a vague reference to Tory economics generally.

Mr. Bob Brown: They did not think it was a fraudulent prospectus.

Mr. Barnes: I was talking to a lady in my constituency—she was not a Labour voter and, indeed, I do not think she liked any politician—and she told me that the one thing she was sure about was that this Government had said that they would reduce prices and had not done so. That is the way an overwhelming number of people now look at the matter.
It is no good saying that the cut in S.E.T. makes any real contribution to reduced food prices. Ministers have been wildly optimistic about a cut in S.E.T. The Chancellor of the Exchequer in his Budget Statement said that such a cut would have a direct influence on prices. But the Financial Secretary to the Treasury, winding up at the end of the Second Reading debate on the Finance Bill on 28th April, went much farther and made some fantastic statements. He said, among other things:
… food store after food store has been bringing down prices as a result of the cut in S.E.T."—[OFFICIAL REPORT, 28th April, 1971; Vol. 816, c. 558.]
This is absolute nonsense, for the following reasons. Let us take as an example a multiple group with, say, 100 branches. The saving in S.E.T. to that group in a year will amount to £100,000. Let us imagine that the takings of each of the 100 branches are about £5,000 a week. This means that each branch, as a result of the cut in S.E.T., will be able to reduce prices by about £20 a week. A reduction of £20 a week on takings of £5,000 a week amounts to less than ½p in the pound. It may be that some outlets will concentrate all that £20 on making reductions on certain items. They may well do that for a limited period, but it will not go far. Indeed, taken over a period the price reduction which can be made from the cut in S.E.T. is very marginal.

Mr. Peter Mills: No.

Mr. Barnes: Does the hon. Member for Torrington (Mr. Mills) consider that a price reduction of less than ½p in the pound is significant in terms of grocery prices at present?

Mr. Mills: However the hon. Gentleman seeks to put it, in regard to food alone the saving in regard to the cut in S.E.T. is £85 million. That has certainly been of some help—or does the hon. Gentleman want to see S.E.T. remain?

Mr. Barnes: Of course it will help the Chancellor, and indeed the taxpayer, but it will be followed by the imposition of a value added tax. I am talking about how significant are the reductions in food prices that can be made as a result of the cut and, as we have seen, they are marginal in the extreme—less than ½p in the pound.

Mr. Evelyn King: rose—

Mr. Barnes: No, I am sorry, I will not give way. My time is running out. The evidence which The Grocer produced recently is that in most cases in the grocery trade a reduction in S.E.T. will be pocketed by the trade to improve its profitability.
Competition has been mentioned very much by the right hon. Gentleman, who says that where there is competition prices will then come down. As regards the grocery business, I wonder how well he understands the complexities of food marketing. Power has moved dramatically in the food marketing business to the big groups, the supermarkets with many different outlets. They are able to twist the arms of their suppliers to give them bigger and bigger discounts. That enables the multiples, the supermarkets, to cut prices to the consumer. But the trouble is that that reduction by the supermarkets is very soon offset by increases in prices which manufacturers are forced to make because of pressure from the big buying groups. This is a very complex situation. It is not enough to merely say that where there is competition, prices will come down. But the Minister has very much made that his point of view, and he pins his hopes on bringing down food prices in the future almost entirely on promoting competition. He has said that he will not intervene when he has been asked, during Question Time, to intervene in various


ways. He has said that he does not consider it his business to do so. He does not believe, apparently, that consumer protection, through organisations such as the Consumer Council, has anything to offer.
The Minister described my right hon. Friend's early warning system, on the 9th February, as "a public relations measure". But I doubt whether food manufacturers would have described that system, and the references that they have had to make to the Prices and Incomes Board, as a public relations measure. They were very serious measures which raised problems for food manufacturers. But they were very much in the public interest then.
Surely the lesson of the last ten months is that sooner or later, and the sooner the better, we have to turn to some sort of prices and incomes policy. I supported the prices and incomes policy brought in during the last Parliament, but it was a policy which created a lot of opposition. Some of my hon. Friends were bitterly opposed to it, and it was only partly successful.
The mistake made by the right hon. Gentleman—and it is characteristic of his approach—is that he considers, because the prices and incomes policy of the Labour Government was not entirely successful, that therefore all similar attempts of this kind are doomed. The Minister may shake his head but this is the response that we have had Question Time after Question Time—that because it did not work entirely it was no good. Perhaps he will change his mind today. If he still holds that view, he is in a minority.
The crude way in which the Government are trying to hold down wage settlements without a proper incomes policy is dividing the country and storing up a great deal of ill will. It is impossible to moderate wage demands in the private sector without parallel action on prices, especially food prices, to establish confidence that the Government are trying to follow a fair policy and not one which means that the devil takes the hindmost.
Food prices are, perhaps, the most crucial of all, especially to low-income families and retired people. That is why my right hon. Friend the Leader of the Opposition singled out certain food prices

among the key prices he listed in his recent speech in New York, when he spoke of a compact between the Government and various sections of the community. He emphasised there that the first condition of any compact of this kind must be parallel action on prices. There is none at present. On 16th June the Prime Minister implied that there would be. His statement cannot be read in any other way. Food prices are now up by 10 per cent, on a year ago. We want to know when and how the Government will do something about it.

6.35 p.m.

The Minister of Agriculture, Fisheries and Food (Mr. James Prior): I congratulate the hon. Member for Norwich, North (Mr. Wallace) on his good fortune in the Ballot and on the debate that he has initiated. I will deal with many of the points he made. I am sorry that the debate has not been better attended, but I gather that there have been other activities in the House this afternoon and that this has restricted the number of hon. Members who have considered this an important subject.
My hon. Friend the Member for Birmingham, Perry Barr (Mr. Kinsey) summed up the subject of the debate very well when he said that it is not a matter of who has caused it but who will put it right, or cure it, which counts. That should be the point to which we should address ourselves. The hon. Member for Brentford and Chiswick (Mr. Barnes) tried to do so. I will come to some of his points as we proceed.
The core of the Motion requests the Government
to set up an organisation for consumer protection with powers to scrutinise and check prices of essential goods and services.
As I see it, this is a further request for the restoration of the previous Government's prices policy, for a Prices and Incomes Board, and all the complicated paraphernalia for bureaucratic scrutiny of commercial pricing decisions. It will come as no surprise to the hon. Gentleman that I am opposed to this. My resolve is stiffened by the complete lack of any evidence that interventionist policies have been successful in the past in holding down prices.
While the hon. Gentleman was speaking of the need for a prices and incomes policy, his hon. Friend was muttering


that it had not made much difference to prices. Hon. Gentlemen seem to believe that they have only to set up a board or institute an inquiry and the problem will be solved, or at any rate brushed under the carpet. Boards and inquiries can sometimes deal with the effects of a policy, but they do not get to the root of the problem. That is the important thing.
In the days of the Prices and Incomes Board, business men had to give up many hours explaining their proposals to Government Departments or providing evidence to the Prices and Incomes Board. Several business men have told me that they used to spend more time consulting their competitors on how to present a case for an increase than competing with each other to keep down prices.

Mr. Dennis Skinner: Nonsense.

Mr. Prior: The hon. Gentleman says "nonsense" but this is what I have been told. He will see my point as I develop my speech. Judged by the criteria of price increases, the period of office of the Labour Party was disastrous. The hon. Gentleman made a good deal of the fact that I always quoted the increase in the cost of living in relation to the last year of the Labour Government and that this was not entirely fair. But it is the trend that has been established which is the important part. In June, 1965, the percentage increase over the previous June was 3·1. It then rose by 5·2, by 29, and by 1·9. But in 1969 it went up by 7·4, and in 1970 by 6·2. Those are the increases which we have had to accept in the last two years.

Mr. Eric S. Heffer: The Government were going to stop it and bring it down.

Mr. Prior: I should not for one moment attempt to belittle the problem that we face.

Mr. Heffer: Would the right hon. Gentleman give way?

Mr. Prior: No, I will not give way to the hon. Gentleman. He always makes speeches from sitting positions, and I will not give way to him. The hon. Member will just not get away with that

sort of behaviour in the House, and it is time he knew it.

Mr. Heffer: On a point of order, Mr. Speaker. The right hon. Gentleman has made references to my behaviour as though it has been improper. I put myself in your hands, Mr. Speaker. As far as I know, I have broken absolutely no rules of the House. I asked the right hon. Gentleman to give way. I have sat here for most of the afternoon. I requested the right hon. Gentleman to give way on this point. Perhaps you, Mr. Speaker., will inform me what rules I have broken which would justify such a statement by the right hon. Gentleman.

Mr. Speaker: Fortunately or unfortunately, I have no control over what the right hon. Gentleman or any other hon. Gentleman may say, and it is not for me to comment on the behaviour of hon. Members. There has been no breach of order.

Mr. Prior: The hon. Gentleman spends a great deal of time shouting from a seated position and I will not give way when he gets to his feet. He is always getting to his feet. He will have to put up with it this time, because I am not giving way.

Mr. Heffer: You just answer a few questions.

Mr. Prior: In the course of my speech I will do a great deal to answer questions.

Mr. Heffer: Just tell us what you are going to do.

Mr. Speaker: Order. I said a moment ago that there had been no breach of order. Now the hon. Gentleman is coming near to one.

Mr. Heffer: I will break rules of order, too.

Mr. Prior: I will deal with the points raised by the hon. Member for Brentford and Chiswick—[Interruption.]—over that interruption. I will take an actual example of bread prices, which I think is important. In 1964 when the Labour Government came to power the price of an ordinary large loaf was 1s. l½d. By June, 1970, it had risen to Is. 9d., an increase of 55 per cent. During that period of time the baking industry had been subjected to regular surveillance and


to no fewer than four detailed inquiries by the National Board for Prices and Incomes—that is, four detailed inquiries in just under six years. Despite all that, there was an increase of 55 per cent, in the cost of a large loaf.
As hon. Gentlemen know, last summer it was widely predicted that the price of a large loaf would have to rise by 2d., and I confidently predict that had hon. Gentlemen opposite remained in office and continued to operate their so-called controls that the increase would have come about long since. In fact, the only increase which the very competitive position prevailing in the industry has allowed to occur is one old penny per loaf last November and that had to be rounded down to 0·8d. on decimalisation—and this at a time when cereals prices throughout the world have reached their highest level ever.
What has happened here is an excellent example of the effect of giving a free rein to competitive pressures and makes it plain that the large interests must compete with each other rather than come to the Government and ask them to fix the price for them. I do not suppose the industry would have minded continuing with the old system, which effectively guaranteed it full recoupment of its cost increases.

Mr. Cledwyn Hughes: The right hon. Gentleman has been very critical of the National Board for Prices and Incomes. In fairness, will he agree that in relation to some of the commodities in respect of which my right hon. Friend and I made references to the Board, the Board found that the increases being sought by the industry were not justified?

Mr. Prior: Certainly; the Board found from time to time that increases were not justified. I am saying that competition would have kept those increases to the very minimum. However, I should be the last person, particularly as Minister of Food, to wish to give the impression that the Government are not greatly concerned about rising prices of food and other essential goods. I recognise full well the burden that increases in the cost of living place on pensioners. The lowest-paid workers and those on small fixed incomes suffer most from them. Yet the country as a whole has not been pre-

pared to accept that stable prices are simply incompatible with large increases in incomes year by year which have not been earned by higher productivity. That is a statement which is taken from the 1969 White Paper published by the Labour Government. I am very surprised the hon. Member for Walton did not rise on that one.

Mr. Heffer: The right hon. Gentleman has just quoted from a White Paper. We have heard him explain that there has been a continual rise in the cost of living under the Labour Government. What we are interested to hear is what the Tory Government intend to do about it, because they said that they intended "at a stroke" to deal with this question. When will he tell us what the Tory Government's policy is to deal with the increase in the cost of living?

Mr. Prior: I am in the process of telling the hon. Gentleman exactly what we are doing. It was notable that only one hon. Member opposite, namely, the hon. Member for Brentford and Chiswick, made any mention of wage increases. It is of fundamental importance, not only that we should overcome the problem of rising prices, but that people should realise the causes of it. This is where I come to the question asked by the hon. Member for Walton. There is no doubt that the main cause is quite simply paying ourselves too much. We shall get price increases down only by reducing labour costs. This is why the Government have taken action wherever possible to bring down the overall level of wage settlements.

Mr. Bob Brown: The right hon. Gentleman says that paying ourselves too much is the trouble. He then says that we must reduce labour costs. "Paying ourselves too much" must also mean taking too much in the form of profit, but he has not yet mentioned that.

Mr. Prior: The hon. Gentleman must know that profits have fallen considerably in the last two or three years and that one of the problems which all industries now have to face is the lack of cash to reinvest. Failure on the part of the nation to realise the seriousness of the situation can also result only in greater hardship and higher unemployment.
This inflation of wage settlements has its roots in what happened in the period before the election; and we have never claimed that it could be halted overnight.

Mr. Heffer: At a stroke.

Mr. Prior: Unless a halt is called fairly quickly, the course of inflation could lead to disastrous consequences, not only for trade union members themselves but also for the nation as a whole. We therefore consider it imperative that all concerned with wage settlements should take full account of the national interest in the widest sense so that the general level can quickly be brought more closely into line with the growth in output.
There are encouraging signs that the upward trend in pay settlements has been checked. For example, in the last quarter of 1970 local authority manual workers received increases of about 15 per cent, to 16 per cent., whereas more recently other important manual groups in the public sector have settled for increases of about 10 per cent, or less.
In the private sector, although there have been some high settlements—in the motor industry for example—these should not be taken as indicative of the overall pattern. There are, in fact, encouraging signs of a growing recognition that the general level must come down and the Government for their part will do everything possible to encourage this. If hon. Gentlemen ask me my opinion of the motor car industry, I am prepared to give that as well. I will make it plain how much I deplore the settlements reached in the car industry. Nor should the car industry, on either side—management or unions—be under any illusion about what the rest of the country thinks of what they have done.
Hon. Gentlemen opposite seem to doubt what I say about the effectiveness of competition. I do not think that I can do better than refer them to the recent Report of the much-vaunted National Board for Prices and Incomes on food distribution. I think we all know why that inquiry was set up. It was, of course, no more than a political gimmick to try to take some of the steam out of the situation before the election last June. It was, at the same time,

a useful stick to try to show that the big retailers were taking advantage of their position to increase their profits at the expense of the housewife. [HON. MEMBERS: "So they were."] But it has boomeranged on them, because the objective has certainly failed. The Board's Report has shown firmly that the extremely competitive conditions existing in the retail trade are working to keep down profits and margins and encouraging improvements in efficiency.
Let me give another example of competition working. When my right hon. Friend the Chancellor announced in his Budget speech the halving of the rates of S.E.T., there was an immediate response by a number of leading multiple food chains and department stores. They all tried to steal a march on each other to get customers into their shops. This is what competition is about. They did not wait for the operative date in July, and in many cases a series of price reductions already has given a valuable lead to die trade.

Mr. Skinner: rose—

Mr. Prior: I cannot give way. I have already given way quite enough. Time is getting very short.
I know that housewives tend to think that they are powerless to help themselves and powerless to drive a hard bargain. This is not true, and is well brought out by the way in which they regularly beat the food index. The food index is produced as part of the machinery of the General Index of Retail Prices. It measures price changes for what is effectively a fixed basket of goods—fixed in the sense that it naturally cannot allow for the housewife who goes from shop to shop to get a bargain.
The figures for household expenditure, on the other hand, reflect what householders actually spend, and this, of course, reflects the extent to which housewives take advantage of special offers and switch away from seasonally expensive items. In the last few years, about one-fifth of the increases in prices has been avoided by intelligent shopping. Put another way, one-fifth of the effects of rising prices has been beaten. [Interruption.] Hon. Members opposite should take some credit for this, because it was going on during their period of Government.
The Report of the National Board for Prices and Incomes bears all this out. Its survey of housewives showed that they are for the most part ready to take advantage of the scope for getting a good deal. This is well illustrated by what is happening with regard to meat. For reasons of supply, beef is now very expensive but pork is relatively cheap. Many housewives have swapped from one to the other. That is good sense. [Interruption.] That is what is happening.
I must also point out to the House the fact that the proportion of total consumer expenditure which goes on food continues to decline. We are now spending a smaller proportion of our incomes on food as our general level of prosperity increases.
Reference has been made to the nationalised industries, and I want to take this up. One of the first things that we did on coming into office was to reduce the postal charges which the previous Government, presumably, had accepted, because in any event they had allowed the stamps to be printed. Those reductions were worth £30 million over a five-year period. The second example is in steel, where we recently halved the British Steel Corporation's suggested range of price increases. This cut will have saved the food and drink manufacturing industry about £2½ million per annum in cost increases of tinplate alone.

Mr. Kaufman: rose—

Mr. Prior: The hon. Member for Norwich, North, who opened the debate, referred to the standard shopping basket which is regularly priced by the Eastern Evening News. I know that this exercise is carried out in good faith, and it will be no surprise to the hon. Gentleman that I have been following its reports carefully during the last few months. My Ministry has found that the increases recorded tend to overstate the overall rise in prices as indicated by the official food index.

Mr. Wallace: I have also been checking those prices and I checked a number of them this morning. They are quite accurate. It depends what quality and brand one buys.

Mr. Prior: Of course it does. But we have an official food index, which has

been supported by both parties, in all Administrations, and it shows a slightly lower figure than the figures which have been shown by this particular exercise. [Interruption.]

Mr. Speaker: Order. Hon. Members should not shout from seated positions.

Mr. Prior: The hon. Member for Erith and Crayford (Mr. Wellbeloved) said a lot about the butchers and he quoted some extremely extravagant remarks, some of which have been made recently by the butchers. All I can tell him is that there is absolutely no case for saying that the increase, in meat prices has been due to our levy policy. The levy policy does not even start until 1st July. It is absolute nonsense, therefore, to say that the levy has had anything to do with the increase in the prices of meat.
The truth is that we are in a situation in which beef is in very short supply. The amount of home-produced beef at the moment is running at only about the level of 1964 and somewhat below the level of last year. At the same time as this has happened, imports of beef have fallen sharply. The Argentine, for example, from which we used to obtain quite large supplies of beef, is now itself having to have meatless days because it cannot find enough beef to feed its own population.
When the levy policy is introduced, it will do no more at this stage than underpin prices to prevent them dropping and causing the taxpayer excessive subsidies. It is Government policy over the next three years to reduce the subsidies paid out to fanners and to see that farmers get their return from the market. I would have thought that to have a situation in which farming does not expand is certainly not in the interest of the housewife. She is having to pay inflated prices partly because of the failure over the past few years of British agriculture to produce more food.
My message to housewives and to hon. Members is that if we have a strong British agriculture, we shall have plenty of food at reasonable prices. I do not believe that in East Anglia or any other part of the country—and particularly East Anglia, where there are low-wage earners—there is any point in denying that for many years agriculture and farm workers have not had a fair chance of achieving a reasonable standard of pros-


perity. I believe that the present Government policy is fair to both consumers and to farmers.

Question put and agreed to.

Resolved,
That this House, noting the increase in prices of basic foods with the consequent hardship to families in areas of low average wages and increasing unemployment, but not classified as development areas, calls upon Her Majesty's Government to set up an organisation for consumer protection with powers to scrutinise and check prices of essential goods and services.

Orders of the Day — MINERAL WORKINGS BILL [Lords]

Order for Second Reading read.

7.0 p.m.

The Under-Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move, That the Bill be now read a Second time.
This Bill comes to us from another place, and it is needed to ensure the continued solvency of the Ironstone Restoration Fund, set up by the Mineral Workings Act, 1951. The Fund was established for two main purposes—first, to finance the reclamation of past dereliction, then covering about 2,500 acres of land caused by opencast iron ore extraction in the East Midlands and, secondly, to ensure that, in conjunction with planning control, future workings would be restored to a proper standard. The Fund has been financed by a levy on ironstone operators. That levy was 2¼ old pence per ton of ironstone worked by opencast methods.
Rather than convert the precise old pennies calculations into decimal coinage I shall be referring to old pence in all the figures that I give.
To this figure of 2¼ old pence the Exchequer added three farthings per ton, making 3 old pence in all. Normally the operator has been able to recover half the 2¼ old pence from the ironstone royalty owner, so that the owners themselves also contribute, although indirectly.
There is an exemption from the owner's share if the ironstone is owned by a charity or the land is subject to a full restoring lease. The resources collected in this way and accumulated in the Fund have been used in three main ways—first, the Fund has met the cost of restoring virtually the whole 2,500 acres of dereliction existing in 1950. There are only one or two small, isolated pockets of dereliction remaining. Virtually we have completed the initial job. The work has been done partly by local authorities and partly by the ironstone operators, and it has been financed by the Fund and approved by the Minister controlling it—now the Secretary of State for the


Environment. This work has been made possible by the existence of the Fund.
Secondly, the Fund has met part of the costs incurred by operators in complying with restoration requirements imposed on them since 1950 and conditions attached to planning permissions. These planning permissions call for the levelling of land and restoring of topsoil. The Act of 1951 entitled operators to receive from the Fund the approved cost of this mandatory work, in so far as it exceeded the so-called standard rate.
I ask the House to note the term "standard rate", because it is a term of art in the Act of 1951, and in the new Bill it is also paramount. I shall return to it later and explain its significance.
The third purpose for which revenue from the Fund has been used has been to level land and to put it back into good heart for agriculture or, where the alternative has been preferable, to use it for afforestation. For the purpose of bringing land back to fertility my right hon. Friend draws on the Fund to make grants to owners and occupiers of land which has already been levelled. These are the ways in which the restoration has been done up to date. Up to March 1971, about £250,000 had been spent out of the Fund on reclamation of derelict land worked before 1950. About £1,500,000 had been paid to operators for the cost of complying with restoration requirements in excess of the standard rate, and just over £500,000 has been paid to landowners and farmers for agricultural aftercare; and forestry and amenity work brought the total disbursement under the Fund to £2½ million.
The accounts of the Fund, which are laid before the House annually, show that at 31st March, 1970, there was a balance in hand of £444,000. Nevertheless, given the trends, which are totally predictable, insolvency of the Fund would, but for the measures proposed in the Bill, face those responsible for its administration. It does not require any great depth of understanding to realise why this insolvency has come about. The reasons are simple. Although the cost of restoration, like other things, has been increasing year by year, contributions to the Fund are still at the level fixed by the Act of 1951, which contained no provision enabling

the rate of levy—which was fixed over 20 years ago—to be altered. Nor was there any provision in the Act for the standard rate to be changed by any provision in the legislation.
The concept of the standard rate was that operators generally had some liability to restore land under their leases and should continue to bear, without assistance from the Fund, the cost of meeting these requirements, drawing upon the Fund only to the extent that planning conditions required them to restore to a higher standard than was generally called for in the leases. The Act of 1951 left the standard rate to be determined by Order. This took place in 1955, when a figure of £110 per acre was made the standard rate. There was no provision for changing this, once the £110 per acre had been fixed.
In 1955 the figure of £110 seemed adequate, and it reflected the average cost of restoring an acre of land in 1950 to the standard required by the leases at that time. Therefore, it is precisely 21 years out of date. Consequently, the ironstone operators have, as the years have passed, been bearing a decreasing proportion of the total restoration costs, while the share borne by the Fund has increased correspondingly. It is not very surprising that payments out of the Fund are overtaking income, and this trend not only exists but is now being accentuated, because, on the one hand, iron ore production is falling —which means that contributions are diminishing—and, on the other hand, the closure of quarries enables restoration to be speeded up, so that the time lag between receiving contributions for the ore extracted and paying for the restorating is shortening.
The Bill proposes measures to keep the Fund on a sound financial basis and so enable current restoration standards to be maintained. One objective has been to provide the flexibility that the Act of 1951 lacked, and so enable the Fund's stability to be maintained in the future by permitting any variation in contributions and in the standard rate that may subsequently prove necessary for that purpose to be made without further amending legislation.
Under Clause 1 my right hon. Friend will be required to prescribe by Order a new rate of contributions to be levied on ironstone operators in respect of ironstone extracted after 1st April, 1971.
Contributions at the new rate will first become due after 1st April, 1972, since the operator pays each April in respect of extractions in the preceding year. The Order must also prescribe a new reduced rate applicable to owners who are exempted from the owner's share of levy—charities and owners who have granted full restoring leases. The exemption originally provided for in the 1951 Act will be maintained. The Clause also empowers my right hon. Friend to vary the rates of contribution from time to time, as may be necessary, by making new Orders; so it will have this flexibility and updating process which was not part of the original provision.
Clause 2 deals with the owner's share of the contribution levied on the operator. Under the 1951 Act the owner pays half. Under this Clause my right hon. Friend will specify by Order what the owner's share of the new contributions will be. It is recognised—this is why we have put this provision into the legislation—that some of the original leases may leave very little profit margin from which the royalty owner could be expected to contribute more to the Fund, thus having to contribute more than he is drawing by way of royalties. For this reason the Clause is drawn so that the Order may prescribe different rates of owner's contribution according to the terms and the dates of the original leases under which the owners draw their royalties.
Perhaps I should explain that a good deal of what is in the first two Clauses is a re-presentation of the provisions in the 1951 Act and that the essence of the new matter lies simply in giving to my right hon. Friend a new power to vary from time to time the rate of levy on the operators and that part of the levy to be passed on by them to the royalty owners. In other words, the first two Clauses deal with the income side of the Fund.
Clause 3 will affect the outgoings of the Fund. It empowers my right hon. Friend to vary from time to time by order the standard rate which I defined earlier. This represents the restoration cost per acre which the operator has to meet from his own resources before drawing on the Fund. The intention is that the original standard rate of £110 per acre should be revised so as to reflect

the current cost of doing the work that used to cost £110 in 1950.
The first three Clauses are, therefore, complementary in enabling my right hon. Friend to see that the Fund's income and outgoings are such that it remains able to meet its obligations. But before he makes any order he will be obliged under Clause 4(1) to consult representatives of the ironstone operators and of those who have an interest in the worked land. Obviously this must include surface owners as well as the royalty owners where the two differ.
It may help the House if I explain that in practical terms "ironstone operators" today virtually means the British Steel Corporation, since, apart from one company producing pigment and working ironstone on a very small scale, production in the ironstone district by the private sector has in face ceased. There have already been discussions with the Corporation, the Ironstone Royalty Owners Association and the Country Landowners Association, and these consultations will continue with a view to the making of orders under the new powers in the coming months.
In addition to the statutory requirements, my right hon. Friend proposes to arrange for officials of his Department to meet the British Steel Corporation and representatives of the royalty owners and landowners regularly, so that for the future the state of the Fund may be kept under review in the light of the industry's forecast of developments.
It only remains for me to draw attention to Clause 4(2) which abolishes the Advisory Committee on Ironstone Restoration. This committee was established under Section 34 of the 1951 Act. Initially the committee undoubtedly played an extremely useful rôle in helping the Minister to fix the standard rate for 1955 and in advising him on certain other technical and costing matters. However, the Committee has not met since 1957 and it therefore seems inappropriate that we should continue to keep it in statutory existence when there appears to the Government to be no purpose in so doing.
I hope this will be seen as a helpful Bill which is designed to continue the work of restoring the environment in areas which have been used for this form


of extraction, and that the House will feel it is a Bill that they can welcome.

7.14 p.m.

Mr. Alan Williams: I do not intend to take up too much time in dealing with this Bill, but there are three specific problems with which I should like to deal briefly, and to which I may return when we reach the Committee stage. These three problems have one factor in common—that is the possible arbitrariness of the rôle of the Minister. I will try to demonstrate during this brief contribution that the arbitrariness which has been displayed in dealing with the first problem is an ominous warning of the arbitrariness which may be shown in the exercise of the powers which give rise to the other two problems.
The first problem is one to which the hon. Gentleman alluded—the problem of the deficit on the existing Ironstone Restoration Fund. I do not think the figures are a matter of great dispute, but it would be as well to outline the situation in case there is any difference, so that the Minister will have an opportunity to remedy any inaccuracies later. I understand that there are at present approximately 3,140 acres of land which have already been worked for ironstone but which remain to be restored. The average cost per acre of levelling and spreading is about £545 of which, as the hon. Gentleman accurately said, the operator is responsible for £110, the standard rate to which he referred. The operator claims the balance above the £110 from the Minister under Section 9(1) and (2) of the 1951 Act, which is qualified by Section 2(2) of that same Act to make it clear that the Minister's responsibility does not involve Exchequer payment. It involves only payment from this Fund. I think that is the situation as it stands.
It has given rise to a problem to which there is no legal solution, as I hope to demonstrate. We have possible operators' claims on the Fund of £1⅓ million in addition to which, because of the type of expenditure, to which he referred, by local authorities on fencing, attempts to improve the fertility of the land and so on by farmers, we have to allow about another £100 per acre for this additional expenditure which can be claimed against

the Fund. Therefore, we have a total possible—I would go so far as to say probable—claim of £1·6 million against the Fund.
The problem to which this gives rise is the direct outcome of the fact that since 1951 costs and standards of restoration have risen substantially, whereas contributions per ton of mineral and the standard rate per acre restored have not changed. So we are faced with outgoings of around £1½ million, but, with the contributions outstanding, the total assets are only about £0·4 million. I believe the hon. Gentleman gave a figure of £440,000. We have a net deficit of around £1¼ million, speaking in round figures. That figure would vary whatever estimate we put upon it because of the future changes in costs.
From this deficit two important questions emerge. The first is, how should we avoid a future deficit? I think the Under-Secretary is right in saying that we must in future ensure that there is flexibility and that it is possible to alter the contributions and the standard rate to reflect adequately changes in costs. This was a serious mistake in past legislation and one which we should remedy on this occasion. I support the hon. Gentleman in that intention.
The difficulty arises over how we clear the past deficit. The noble Lord, Lord Sandford in another place on 1st April said, when speaking on the British Steel Corporation:
… as the proper successor to the industry and heir to its liabilities
—I stress the word "liabilities"—
as well as its assets, it is right that the responsibility should pass squarely on to the shoulders of the Corporation …".—[OFFICIAL REPORT, House of Lords, 1st April, 1971; Vol. 316, c. 1510.]
But of what liability is he speaking? The liability is clearly established at law and the liability at law is £110 an acre plus the contribution per ton. The contribution per ton has already been paid and the Steel Corporation is right to make its contribution of £110 per acre.
It is not the responsibility of the Steel Corporation that a deficit exists. It has fulfilled its legal commitments. It is the fault of successive Governments. I am not attributing responsibility to the Under-Secretary. Successive Governments have over 21 years failed to deal with


the problem. The fault lies with the Minister who is in charge of the Fund and who may bring legislation to this House if he wishes. Because Ministers in the past have failed to act and have failed to bring amending legislation to this House, it is the Steel Corporation that is being condemned to paying the £1 million deficit which has arisen during these years. That may be politically expedient, but it is of doubtful equity.
I agree with the principle enunciated in the other place by both Lord Greenwood and Lord Sandford—to put it in Lord Sandford's words—
… the man who despoils or damages the countryside must be made to pay for the damage for which he is responsible
—but the same Minister in the other place had said only a moment earlier:
It is true that some will be land which has been worked by other operators" —[OFFICIAL REPORT, House of Lords, 1st April, 1971; Vol. 316, c. 1510.]
So much for the inviolable principle of damage being paid for by those responsible for it.
What we have, therefore, is a Minister using the full weight of his Parliamentary power arbitrarily to impose an additional obligation on an operator—in this case the Steel Corporation—who has not even caused the damage and who has honourably fulfilled the legal debts and obligations required of him. I urge the Minister to think again before the Committee stage. There is a dangerous precedent here, the precedent that, when a company, be it private or public, has fulfilled its legal obligations, a Minister may retrospectively—for that is what it amounts to in being applied to work already undertaken—change the nature and the level of those obligations. That approach to problems of this sort causes concern not only to the Steel Corporation but to others, as, I am sure, the hon. Gentleman will discover during the debate.
The Steel Corporation, which has already been denied £100 million of investment grants and 7 per cent, of the price rise which it considered necessary, now has to meet £1 million for which it has no legal responsibility whatever. In effect, since it has been found that responsibility under the 1951 Act for the deficit is now—if I may use a non-

legal term—in limbo, the Government are shrugging off their responsibility and imposing it, with full use of the Parliamentary majority, upon the British Steel Corporation.
If I may make a point of slight political significance, I noticed that in the other place—this is reported in HANSARD, C. 271 on 15th March—the Minister went to some length to make clear that outstanding restoration by the private sector of the steel industry would be largely completed before the new standard rate was introduced. This sounds somewhat questionable, and, as I say, we intend to explore the matter in greater depth in Committee.
That is all I say on the first problem. I am not asking for assurances now—we shall have a chance to discuss it further —but I hope that the Under-Secretary of State will consider the complaint which I have expressed, which, I suspect, will be echoed by other hon. Members.
The second and third problems are inter-related: the first is the future of the contributions and of the standard rate, and the second is the abolition of the Advisory Committee. I have already said that I completely accept the need to vary the income of the Fund as costs and standards rise. Failure to make that provision was a serious mistake in the past, and I give entire support to the Minister's present intention. However, I am a little afraid of the unimpeded arbitrariness of the Minister's power and his complete freedom from any checks in the future in altering either the contributions, or the standard rate, or both, save as regards the Government's contribution, of course. This is the one contribution which cannot and will not be altered. The Government's contribution is fixed in the Bill at the level at which it stood in 1951, although costs have risen, standards have risen, and the real value of money has changed in that time.
It seems anomalous that the Advisory Committee existed but did not meet at a time when the Minister had no powers to vary charges but is now to be abolished when the Minister is assuming powers to change charges and the standard rate, and change them very much at the Minister's whim.
The absurdity of the situation is revealed by Lord Sandford's words in the other place on 15th March:
… it was not any defect in the Committee but the inability of the Minister under the Act as at present worded to take action on the advice that the Committee gave."—[OFFICIAL REPORT, House of Lords, 15th March, 1971; Vol. 316, c. 279.]
Now that the Minister has power to act under this Bill, the defect alleged against the Committee has been removed, yet at that very point it is to be prevented from giving advice.
There is a suspicion here—it may be utterly unjustified, and I have no doubt that the hon. Gentleman will make clear what the motive is—that the Minister and his Department may be following a policy of division of voices, hoping not to split opinions but to reduce the volume and effectiveness of what might otherwise be co-ordinated advice. We all know that it is easier to set aside advice which can be represented as coming from individual pressure groups than it is to set aside the co-ordinated and concerted advice of an advisory body. Far from abolishing the Committee, the Minister should be considering the possibility of widening it to include not only representatives of the Steel Corporation, the Ironstone Royalty Owners' Association and the Country Landowners' Association but representatives of the local authorities as well. This, also, is a matter which we shall pursue in Committee.
Against that background of the arbitrary treatment of the past deficit and the possible arbitrariness of future changes in what I may call the restoration tax, for that is what it is, in effect, whatever we call it, we see with some alarm the last straw, that is, that the powers exercisable under the Bill will be exercised through Statutory Instrument subject only to a negative Resolution of the House. So not only is the Minister not subject to any criticism from an advisory body but he has adopted the weakest form of parliamentary control, and that at the very stage when he is introducing a new flexibility into his powers.
I hope that the Under-Secretary will take those points in the constructive spirit in which they are put. I hope that he will have thought again, especially about

the impact on the Steel Corporation, before we take the Bill in Committee. If he can bring forward some modification at that stage, it will considerably shorten our proceedings.

7.28 p.m.

Mr. John Farr: I pay tribute to the valuable work which has been carried out through the Ironstone Restoration Fund for the environment generally and especially for agriculture. In many parts of the Midlands in and around my constituency where many of the workings lie, there has been a tremendous improvement as a result of restoration. A good job has been done. It has not been done simply by returning a lot of earth into the holes willy-nilly; there has been careful restoration, with careful grading and the segregated topsoil put back.
The Ironstone Restoration Fund established under the Mineral Workings Act, 1951, has fulfilled a good purpose. As has been said, there was a considerable backlog of work to do in 1951. About 2,500 acres of worked land remained to be restored. But the Fund has seen nearly all of that done now, and there is only a negligible quantity left.
As my hon. Friend the Under-Secretary of State said, under the Fund a contribution of 3 old pence per ton of iron ore excavated was fixed, the operator paid 1 ⅛ old pence towards it, the royalty owner paid 1⅛ old pence, and the Treasury bore the balance of three-farthings. One of the defects of the 1951 Act, probably unforeseen by its architects, was that costs got so out of hand and rose so much that within a short time, and at an accelerating pace, the contributions became unrealistic and could not cover the full cost of restoration. It was calculated in 1950 that it would cost about £110 an acre to restore land adequately. Today the figure is over £500, to restore land to first-class agricultural condition. It can be restored at a lower figure, of about £200 or £250 per acre, provided the standard required is not so high. But naturally most of the land under which the ironstone lies is first-class agricultural land as is the case in the East Midlands. The owners and occupiers are very anxious to have it restored to its former quality.
The Fund has been running into trouble for some years because the cost of restoration has steadily increased. The levy rate has remained at three old pence a ton of iron ore mined. Unfortunately, in recent years the production of United Kingdom iron ore has been declining, and it is likely to decline still more, particularly in the districts around Corby and elsewhere, with the result that the gross output upon which any levy is calculated is likely to be a declining factor. It has been estimated that but for the Government's action in the Bill the Fund would shortly go into deficit. The figures I have agree that roughly 3,000 acres of land remain to be restored. If it is to be restored to first-class agricultural standard, an expenditure of about £1·5 million or £1·6 million is foreseeable. Yet the Fund, on its existing mechanism, can produce only about £500,000 more by way of outstanding contributions. Therefore, hon. Members on both sides will welcome the aim of the Bill to bring contributions up to date and make the Fund solvent again.
The Exchequer contribution is one of my big concerns about the Bill. Why is it still fixed at the old rate of three-farthings, whilst the operators and royalty owners' rates will be varied by Order later to be published? We do not know what the figures will be, but they will certainly be increased considerably. Whilst they will be varied to meet the cost of work in 1970, Schedule 2 states that the Government rate shall remain unaltered at the equivalent in new pence of three-farthings.
I do not know, and my hon. Friend did not say, what he thinks the cost of restoration per acre is likely to be, and he did not say what he thought the levy was likely to be when the Order is produced. It is now three old pence a ton, but I should be very surprised if he is not thinking of a figure of about 5 new pence a ton, at the lowest.
The increase in levy is welcome, but the equitable way to deal with it would be, if, say, an increase of four times is required, simply to multiply by four the contributions from the different sources to the Fund, the operators, royalty owners and the Government. But it seems that the Government have no intention of doing that. Paragraph 4 of

Schedule 2 says that they will be responsible for contributing only the same rate of three-farthings a ton. The pegging of the Exchequer contribution at the rate fixed by the 1951 Act relieves the Exchequer of bearing an equitable share of rising costs; it means that the considerable rise in costs since then will be suffered by the royalty owners and operators, who are largely the British Steel Corporation.
It is desperately unfair that future production should be saddled with the cost of funding the current deficit in the Fund, which on current workings is likely to amount to £1½ million. It is also desperately unfair that although the owners and operators may not necessarily be the same, a past deficit is to be funded from future workings.
What worries me even more is that the Government's action ignores the fact that the deficiency arises from claims in the pipeline in respect of ironstone production on which contributions have already been paid by both owners and operators.
The Minister said that he did not accept that the Bill is retrospective, but the hon. Member for Swansea, West (Mr. Alan Williams) said that in his view it was. I share the hon. Gentleman's view. In a letter of 8th April in reply to a letter I had sent him on the matter, my hon. Friend the Minister for Local Government and Development said:
I do not know why it should have been suggested that Government is evading its responsibilities. We are not interfering with the original provision requiring an Exchequer contribution of ¾d. per ton of ironstone extracted. Nor is the amending legislation retrospective. The first contributions at the new level will be payable in April 1972. The new standard rate will come into force at a future date to be specified in an Order to be made later this year, after consultation with those concerned.
I should like my hon. Friend to think about this before Committee, because it is not right. There is a certain retrospective action in what the Government are doing. I hope that careful consideration will be given to getting the Government to pay their full and proper contribution to the increased cost of the works.

7.40 p.m.

Mr. George Lawson: I apologise to the Under-Secretary of State for not having heard his speech. I had


intended to be here, but one or two items cropped up at the last minute. Possibly, if I had heard him, I might have modified what I want to say, but I gather, from what has been said by the hon. Member for Harborough (Mr. Fair), that the situation is what I thought it was.
I want to consider in the first place the argument about retrospective legislation in relation to this Bill. I cannot see how it can be argued that this is not a clear case of retrospective legislation—and a mean case at that. The effect of the Bill is to make a person or group of persons, who acted quite properly within the law as it stood, fulfilling their obligations under that law, pay more than they expected to pay under that law. That is a clear example of retrospective legislation. The Bill as drafted undoubtedly has that effect.
The Bill may refer to ironstone extracted subsequent to the date given, but it is clear that the amount to be charged for such extraction will bear part of the cost of restoration following extractions carried out previously. There will be an added burden, a greater charge, on the ore extracted from April, 1971, than would otherwise have been the case. If the Minister denied this and said that the charge will be upon the ore extracted after April, 1971, in relation to restoration of the land rendered derelict by extraction after that date, then this would not be retrospective legislation, but that is not so. About 3,000 acres of land have yet to be restored, but less than one-third of the cost of carrying out restoration will be borne by the extractions subsequent to April of this year. This is imposing upon persons, whether they be individuals or groups or great corporations like the British Steel Corporation, a penalty for actions carried out prior to April, 1971—that is, under the law as it stands.
It may be argued that this cost should have been levied earlier, but it was not. I will not enter into the arguments about why it was not levied. If there was fault, then it was the fault of successive Governments. In these circumstances, the responsibility should be carried by the Government. The degree of restoration can vary greatly in cost. It may be restoration of the land for full agricul-

tural purposes or for quite different purposes—afforestation or amenity, for example. But, as I understand it, the Government are taking power to charge the full cost of restoration up to the maximum, whatever it may be. They are going to see to it that the full cost is borne by those extracting minerals from April, 1971—and that cost will include land still waiting now to be restored.
There is not only retrospective legislation in the sense that firms are to be made to pay for what was done quite properly under the law as it existed. They are to be made to pay up to the hilt for a level of restoration which might mean going far beyond what was required in an earlier day. That is rubbing salt in the wound. It is a very mean line for the Government to take. The Tory Party has made great play of the theme that the Government should get out of business and should interfere as little as possible with the economy. Here, however, is an example of interference of the other sort—imposing burdens that otherwise people would not have been carrying.
Before the 1951 Act, one could virtually do what one liked with land and have no responsibility for clearing up the mess one made. But since 1951 there has been a welcome acceptance of social responsibility for clearing up the mess made in earlier days. My whole area was scarred by pit bings—pit heaps, as they are called, in some parts of the country. There was an 85 per cent, grant—sometimes up to 100 per cent, grant— for the clearing of these eyesores. Society accepted responsibility for clearing up the mess. If, between 1951 and 1971, however, when the parties concerned were operating as the law then allowed, sufficient provision was not made by Parliament to clear up the mess created, we should clearly accept the responsibility now. The Government should say that they will wipe the slate clean for the past but for the future ensure that, when these workings are carried out with considerable destruction of the land, those profiting from them should pay for the land to be restored to a fit condition. That would be the proper thing to do. It is not reasonable to insist that payment being extracted now should bear in large measure payment for something done in the period 1951 to 1971. That is unfair retrospection and the Government should reconsider.
The Government like to assume the guise of being fair. This Measure entails a small amount in relation to Government funds but it will be a large cost to the British Steel Corporation. Perhaps this is a manifestation of anti-naitionalisation bias by the Government. I wonder whether it really is the question altogether of landowners having to pay which has led the Government to adopt this line. A nationalised industry, the British Steel Corporation, will be carrying the burden in the main. That suggests to me a bias against nationalised industry.

Mr. Farr: There is at least one large private operator in iron ore extraction; so the Bill is not purely against the British Steel Corporation.

Mr. Lawson: We all agree, however, that the great weight of this burden is to be carried by the Corporation. That is beyond dispute. I am not saying this positively, but simply suggesting that were it not for the bias so manifest on the Government side of the House, we might have had fairer consideration of this matter. If the Under-Secretary can show by his efforts in Committee that the Government are prepared to turn their backs on this mean little action and behave with a little generosity, we will think much more of him and the Government.

7.51 p.m.

Mr. T. H. H. Skeet: I cannot detect any bias against a nationalised corporation. I pay tribute to the Government for bringing in the Bill, although I am not certain that it is the proper Bill. Several years ago, in 1951, there were many owners and many prospectors and extractors of material. Now there is only one, the British Steel Corporation, and it would seem that simply to bring in money from contributions and to pay out when claims are made, probably after a gap of five years, accounting for the administrative charge, is rather a heavy way of doing it. But this is a matter which could be discussed in Committee.
My hon. Friends have mentioned the facts. It seems to me that there are potential claims of roughly 3,000 acres which have to be restored, taking into account what is yet to be done. One is unfortunately faced with a situation in

which production is declining over the years from 10 million tons to six million tons in 1981. This is no fault of the United Kingdom. Iron ore can be obtained very cheaply from abroad and it is of a much higher grade. Therefore, while there is much restoration to be done, the amount now available for restoration is in the region of £444,000, which is small and largely meaningless, for the simple reason that contributions are made on a tonnage basis, whereas the amount which has to be paid for restoration depends on inflationary factors, and probably other, which act as escalators One has the added predicament that the total cost is likely to be somewhere between £1·25 million and £1·5 million, a very substantial sum.
Hon. Members have considered this problem deeply and have pointed to the fact that the Minister has decided that he must stand by the solvency of the Fund. My hon. Friend has indicated that in several years' time it will be going into the red. This will be rather serious. He has chosen, by Order in Council, to revise the payments which will be made by the mineral operators and by the royalty owners. He has left aside entirely an additional contribution from the Treasury. We debated recently the Town and Country Planning (Mineral) Regulations covering both England and Scotland and provided that planning permission will be granted for a period of only ten years. Mineral undertakers will have to go back to the planning authorities and argue their case afresh, probably in public, and probably be liable to more stringent terms.
This could mean that the undertakers will be under a greater liability. This is an obligation or condition imposed by Statute, and I should have thought that as the Crown was responsible for imposing these terms, the Crown's contribution should be upgraded substantially. In the Bill, however, the Crown's contribution will remain at three farthings, at which it has remained unaltered since 1951.
The Minister in another place said that there was no flexibility in the 1951 Act. This is conceded, but inflexibility by whom? The mineral operators have been paying their instalments year by year against their tonnages. If the Minister found that the Fund was falling far be


hind, the Government of the day, Conservative or Labour, could have initiated fresh legislation to put the matter right. They did not. So we find ourselves in this situation, and I think the hon. Member for Swansea, West (Mr. Alan Williams) was right to say that the British Steel Corporation, while it succeeded to the liabilities of the former owners, succeeded to no liabilities in this connection. Once a contribution had been paid, that was all owners had to do; that purged their liability completely, and new owners took over no liability at all.
In 1950, or thereabouts, it was calculated that £110 per acre was all that was required for this purpose. It has certainly gone up over the succeeding years. It soon became apparent that what the Fund would have to contribute would be a sizeable sum, particularly as we now concede that the cost of restoration is about £525 per acre.
Looking at it fairly and reasonably, I should have thought that this was an opportunity, if the Crown wants the restoration of property to the highest standard, whether for afforestation or for turning land into lagoons, or for the purposes of agriculture, for it to make a substantial contribution; but there is not a bit of it.
Why was the Crown prepared in 1951 to make a contribution of three farthings? The reason was to clear up a backlog, but there must have been some point in it, too, because there were difficulties. One had to extract from the soil and replace the overburden and get the land back for suitable purposes. One of our chief anxieties about the Bill is that we are having the old system of taxation by Order in Council. We are even worse off, perhaps. We knew a little time ago what the contribution was to be and it was unrevised all over the years. Now it is to be determined by the Minister himself by Order in Council. He will prescribe the rates.
My hon. Friend the Member for Harborough (Mr. Farr) has asked what the standard rate is to be. We have had no indication of that. When people make plans they like to know whether it is to be double the contribution, or treble—

Mr. Farr: Or four times.

Mr. Skeet: Indeed. This decision should be made at an early date. The hon. Member for Swansea, West asked: if we put up the contribution and stand by the solvency of the Fund, what chance have we if all that we can do is to try to combat what has been done by means of a negative Resolution? The Advisory Committee is to be scrapped. Admittedly it had not functioned since 1967, but whose fault was that? Could not all the gentlemen be collected together, or was it that the Government did not want it to be solvent?
If the idea was to advise the Government of the owners' recommendations and if it be the Government's case today that this policy must be maintained, even allowing for the fact that there is only one operator, B.S.C., I should have thought that it might be in the interests of the royalty owners that we had the Advisory Committee to give the Minister some views. Otherwise he might come round to the view that if he is to curb the Advisory Committee, it is not the right way of maintaining the solvency of the Fund. I recognise that some sort of fund is desirable.
The yield contributions over the years will be affected by several factors. They are geared, first of all, to falling trends of production, and therefore receipts will drop. In addition, if there is any variation between the yield and tonnage in Lincolnshire, as opposed to that in the Midlands, the yield will also drop. The Midlands has been subscribing, per acre, I think, less than Lincolnshire, but there is this tendency for there to be constriction on the domestic industry in favour of the imported material.
In addition, if there is a higher percentage of total production from charitable lands or the land under full restoring leases, then contributions will come down by that extent. We are looking forward to a future when contributions cannot be precisely stated. They are variable but not nearly as variable when we find out what the cost of restoration is to be.
The inflationary factors working through the economy have been dealt with. The higher standards being maintained by the authorities—and these are being made tougher every year—are leading to a very sorry predicament. These are the crucial facts: in 1969 the yield


per acre of contributions, including Exchequer contributions, was £321. Current restoration cost, per acre, is between £420 and £500. Costs have gone up substantially this year. Expensive equipment has to be installed, as it is no good case to argue that the land may be used only for aforestation. There is plenty of land available for that in certain other parts of the country. What we want to do is to ensure that this land is returned to amenity or agricultural purposes.
The actual payment over the last 2¾ years has been £360 per acre. If the Minister had it in mind that he would double the rate, that would cause a liability on the Fund of about £250 an acre. This would have an effect of transferring liability from the Government in favour of the mineral undertakings and the royalty owners, which would mean the same thing, because the British Steel Corporation is not making a profit and therefore it falls back on the taxpayer. The Treasury must derive its monies from the Consolidated Fund, and therefore we must all pay. If the Corporation ever makes a payment on its profits in future years, the only way it can recoup that expenditure is by putting up prices, because the price of the ore would be more expensive. Or it could run down still further the small quantity of ors which is extracted locally. Some of my colleagues may think that that is an unwise thing to do.
Can the Minister give some answers to several questions I wish to ask? There should be provision under Section 18— that is, dealing with the work not imposed by planning conditions and under Section 20, that is, through the Minister of Agriculture and Fisheries. He has been considering most carefully the Section 9 grants, which were those dealing with planning conditions. When he readies the figure, by agreement or in consultation with the interested parties, will he cover all three Sections—9, 18 and 20?
Would my hon. Friend also give us the most up-to-date figure he has of the total outstanding potential claims? While he is prepared to abolish the Advisory Committee, will he ensure that consultations are continued, not merely with the Corporation but with the Ironstone Royalty Owners' Association? Is he satisfied that his mathematics are correct? I say this because I see one substantial difficulty.

The gap between payments per ton which accrue year by year and claims—that is, the difference between the standard rate and the actual cost of restoration—is about five years. It is, therefore, not possible to examine at any one moment the state of the Fund.
We seem to have got ourselves into a complicated mathematical process and I will certainly support the suggestions that have been put forward on this subject. Could this not be simplified in the interests of all concerned, particularly the owners, the British Steel Corporation and the Government who must operate it? On a former occasion I declared my interest.

8.7 p.m.

Mr. Eddie Griffiths: I congratulate my hon. Friend the Member for Swansea, West (Mr. Alan I Williams), my hon. Friend the Member for Motherwell (Mr. Lawson), and hon. Gentlemen opposite for the way in which they have dealt with this subject. I want to press what I consider to be a moral question. When the bulk of the steel industry was nationalised the then Government took over the assets and liabilities, debts, and so forth, of the 14 I companies and a price was paid, a price according to the valuation, on an equitable basis and according to the law r which then existed—not according to a dreamland law that might come from a future Government of either the same political shading or of another shade.
If we compare this with the act of the present Government in nationalising Rolls-Royce (1971), we see that they allowed the old company to go bankrupt, the receiver went in and the debts and liabilities were washed to one side, with the Government taking over certain assets. To the best of my knowledge there is no indication, as yet, that the Government are taking over the liabilities and debts of Rolls-Royce.
With hindsight, I suggest that if the Government of the day had been able to predict the content of this Bill, which as I understand it will place a substantial liability on the Corporation, then the compensation paid would have been adjusted by deducting an amount which the Government are now saying is an extra liability falling on the Corporation. This is a most immoral act of saddling


the Corporation with a debt which, at the time of nationalisation, it could not foresee. It would be seen that the Corporation has received very little benefit from the iron ore workings in this country. The profits that have been gleaned from these workings in the private days of years ago have now been dissipated and the Corporation tends to use less and less local ore because it is of poor quality and it is cheaper to import ore.
I ask the Minister to think again, not upon any technical or commercial grounds, but on the moral ground that it is wrong at this time to saddle the Corporation with a bill which at the time of nationalisation could not have been foreseen and which, if it had been foreseen, would have resulted in an adjustment to the compensation paid.

8.10 p.m.

Mr. Michael Heseltine: With leave, I should like briefly to comment on some of the points which have been made. The House will appreciate, however, that there will be an opportunity to explore them in Committee.
The hon. Member for Swansea, West (Mr. Alan Williams) welcomed the broad concept behind the Bill, and I am grateful to him for doing so. The most significant point which he made was that the difficulty is not whether we should make up the deficit and put the fund on a coherent financial basis, but who will do it. That was the main burden, not only of the hon. Gentleman's speech, but of the speeches of my other hon. Friends. The first place to which one looks for this purpose is the Exchequer. It has been suggested that the Government should pay, but that means the taxpayer. At present there is already a contribution of three-quarters of an old penny to the fund for every ton extracted.
It might interest the House to know that it was first the Government's view, in reviewing the situation, that the Exchequer had made a real contribution to solving the problem of clearing up derelict land and should withdraw completely from any financial commitment in proposing fresh legislation. It was only after discussions with the various interests involved that the Government were persuaded to go on paying a contribution.

We therefore accept that there is a continuing responsibility on the Government—

Mr. Skeet: The Government made the contribution in the first instance. Would my hon. Friend outline the purpose? Does he not consider it reasonable that they should continue with it, particularly in these inflationary times?

Mr. Heseltine: The Government made a contribution when the first Bill was introduced in 1951 in order to clear up the existing problem involving something like 2,500 acres of land. That problem has been cleared up. Therefore, the first assignment to which the Government agreed to be a party to the tune of three farthings per ton, has come to an end. We are now looking to the situation created by the land which has been worked since the introduction of that Bill and which is to be worked in future. The Government's view was that there was no continuing call on them to remain in the job of restoring this land. It was not a long and unidentifiable historical situation. It has happened in relatively recent years—perhaps over 21 years, but nevertheless in the relatively recent past. The Government did not feel that they would wish to continue to support the work in this way. They believed that the responsibility should rest on the shoulders of the industry as as present constituted.
As a result of the representations made to us, we have decided to continue with the payment of three-quarters of an old penny per ton. We have therefore already gone some way towards meeting the points made by hon. Members.

Mr. Alan Williams: Does the hon. Gentleman agree that the deficit has arisen because of the under-contribution by all the partners under the previous legislation? The Government were a partner. In order to remedy a past defect, the hon. Gentleman has intimated that the first thought of the Government was to withdraw altogether but now say that everyone else should pay more but not the Government.

Mr. Heseltine: There are different factors. The problem has arisen in the relatively recent past. The Government were able rightly to claim that over the last 21 years the initial problem had been cleared up. That was the Government's


total commitment arising under the earlier legislation. They reviewed what should be done about the situation which has developed over the 21 years. After representations, they decided that they would wish to play a continuing part in the important work of restoring the land.
My hon. Friend the Member for Bedford (Mr. Skeet) and other hon. Members asked whether there was a need for the advisory committee to continue.

Mr. Lawson: During the 21 years, the parties other than the Government did everything asked of them. The fact that they did not do enough was not their fault. The fault must be put at the Government's door, whichever party was in office. Both parties are involved. If there was a mess involving 2,000 acres to clear up when the first Bill was introduced, there is a greater mess to be cleared up now which is, in large measure, due to the failure of Governments of both parties in 21 years to ensure that the intentions of the 1951 Act were carried out. Is there not a responsibility on the Government in this matter?

Mr. Heseltine: It is arguable whether the Government have failed. It is arguable—and I would put the argument with great force—that it is the people who created the problem and not the Government who have failed. The Government introduced a scheme to deal with the outstanding problem in 1951. It has been dealt with. If the industry continue to create problems, I do not see why we should say that it was the Government's fault. The industry should have understood that sooner or later the Government would say that it was necessary to sort out the problem.

Mr. Lawson: rose—

Mr. Heseltine: I have put the position as I would wish to put it.

Mr. Lawson: This is an important point. In the 1951 Act the Government assumed power to ensure that the mess of the past was not continued. The fact is that the Government have not ensured that over the years.

Mr. Heseltine: The hon. Gentleman is not right. The Government have ensured it. The mess has been cleared up, and that is what the 1951 Act was designed to do. We are now concerned

about clearing up a mess created since 1951. It has been created in a much shorter period and therefore it is much easier to identify the industry responsible in the last resort for under-paying during all those years. It is now necessary to put legislation on the Statute Book which enables the recently created problem to be dealt with.
The industry which we believe to be responsible and where the money should be found is constituted very largely in the British Steel Corporation, although there is one other small private company. The Corporation has had the benefit over the years since it came into existence of working a lot of this land. Not only has the Corporation worked it and therefore benefited from undercharging in real terms, but so have a given number of companies which were nationalised to form the Corporation. The Government say, modified only by our determination to go on paying the three-quarters of an old penny per ton, that the industry is responsible and the industry must pay.

Mr. Eddie Griffiths: I accept the hon. Gentleman's point that we are talking about retrospective payments back to 1951. But then the Corporation had been in existence for only four years. For the remainder of the time the industry was in private hands. If we are making retrospective legislation now, will the hon. Gentleman undertake to ascertain from the private people who worked these areas the position over the other 17 years, and the Corporation will then be happy to pay in respect of the four years when it was involved?

Mr. Heseltine: The hon. Gentleman must know as well as I do that that would be impossible. [HON. MEMBERS: "Oh"] I do not wish to run away from the point. Some of the concerns are components of the Corporation, but not all. Some will have gone out of business. It is impossible to look back over the situation. It would be much better to have flexibility to keep the charges up to date. But we do not have it, and we did not do it. Governments of both parties have failed in this respect; it is nothing new.
I wish to refer to a precedent which I can quote from my experience. When the Conservative Party came to power


there was a deficit on the driving test fund. People taking the test under the Labour Government had not been paying enough for it and there was a deficit of something in the region of £3 million on costs incurred in testing people which had to be made up. If the argument of hon. Members opposite were adopted, the taxpayer should have made it up. But it was the Government's view that it should be made up from a charge on future applicants to take the driving test. That is the exact paralled to what I am talking about. No doubt by the time we get into Committee there will be a whole range of examples of that sort, where future commitments carry with them an element of cost which relates to clearing up the earlier problem. I am sure every Government have done it and we certainly wish to do anything we can.
It is true that the industry now happens to be the British Steel Corporation. I accept that the hon. Member for Mother well (Mr. Lawson) took the opportunity to make a point in party political terms, but the truth is that it is not that, and it just happens that the industry is the British Steel Corporation. And so it happens that they will be the people likely to bear the charge.
The question was raised about the Advisory Committee. I accept at once what my hon. Friend the Member for Bedford said, that the Committee did a very good job, but the job which the Committee did in the early 1950s was quite different from that which now needs to be done. The fact is that at that time there was a variety of different operators, different leases, different costs, different environmental standards. Somebody had to advise the Government in setting up the paraphernalia on setting up the standard rate in 1955. That was a complicated technical problem on which outside advice was needed. The situation has now quite changed, and it does not require anything like the same expertise in deciding how costs should be revised, so it does not need to be reviewed by the Advisory Committee. I would say at once in reply to my hon. Friend the Member for Bedford that we will certainly consult not only the British Steel Corporation but the owners and the Ironstone Royalty Owners Associa-

tion. I mentioned that in my opening speech and I can repeat the assurance.
I can help my hon. Friend again by saying that the Sections to which he referred, Sections 9, 18 and 20, will go on. Claims will be able to be made upon the Fund—the replenished Fund, I may say—and there is no need for a change in legislation because of that situation.
So I believe that it is right to say that this Bill is widely welcomed. It is completely in the spirit which we all have of wanting to improve the quality of the environment. The only issue is, who is to pay? It is the view of the Government that the polluter must pay the costs. In this particular case, there is certainly a clear responsibility, a firm responsibility on the industry that in its future activities it should bear the cost of putting right the disturbance caused, and accumulated over the last 21 years. I hope that the House will have no hesitation in giving the Bill a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40(Committal of Bills).

Orders of the Day — SCOTLAND (INDUSTRIAL DERATING)

8.23 p.m.

The Under-Secretary of State for Development, Scottish Office (Mr. George Younger): I beg to move,
That the Rating of Industry (Scotland) Order, 1971, a copy of which was laid before this House on 23rd April, be approved.
The purpose of this Order is to continue industrial derating of 50 per cent, for another two years after the Rating of Industry (Scotland) Order, 1965. expires on 15th May this year.
The subject of industrial derating has a fairly long history, and I think it would be helpful to the House, in considering this continuation Order, if I begin by outlining the background.
Industrial properties in Scotland and England and Wales were 75 per cent, derated from 1929 until 1959, when derating was modified to 50 per cent. Derating was terminated in England and


Wales in 1963, a revaluation year, but the Government of the day decided that full rating of industry in Scotland should be postponed until the 1966 revaluation.
Full rating from 1966–67 was provided for in Section 10 of the Local Government (Financial Provisions) (Scotland) Act, 1963 but, as a precaution, power was included in the Section enabling the Secretary of State to continue a measure of derating by order. It was in exercise of this power that the Rating of Industry (Scotland) Order, 1965, was made continuing 50 per cent, derating for the current valuation quinquennium which ends on 15th May next. If that Order had not been made industry's share of the rate burden in Scotland would have risen in 1966 from 12·5 per cent, to nearly 21 per cent., when the share borne by industry in England and Wales was still of the order of 14 per cent. We on this side of the House were, of course, in Opposition at the time, but the 1965 Order had our unqualified support.
No decision could be taken about the level of derating after the expiry of the 1965 Order until the assessors had submitted to my Department their estimates of the likely effects of the forthcoming revaluation on the various classes of property. These estimates have now been received and it is clear from them that if derating were to be allowed to terminate this year the rating position of industry in Scotland would be almost as seriously out of line with that of industry in England and Wales, as it would have been in 1966 if no derating order had been made by the previous Administration.
Full rating in 1971–72 would raise Scottish industry's share of the rate burden from about 12 per cent, to nearly 20 per cent., as against 14·7 per cent, for industry in England and Wales; and Scottish industry's rate bill would, on the 1970–71 figures, rise in that event from £24 million to £40 million. There is no doubt in my mind that an increase of this magnitude could prejudice the ability of Scottish industry to compete on equal terms with industry south of the Border. It could also affect adversely the efforts being made to bring new industry to Scotland and to secure the expansion of existing industry.

Mr. Tam Dalyell: Has the Department done any sums on this

issue of the way rating in Scotland was acting as a disincentive in the past? It would be interesting to have an indication.

Mr. Younger: That is a very interesting point which the hon. Gentleman has raised. There has been no specific study done by my Department into the matter, but it is a matter which has to be very carefully borne in mind. After the Green Paper on the future of local government finance is announced and discussed, this is a point we should take seriously.
Continuation of derating under the Order before the House should maintain Scottish industry's share of the rate burden at about the present level of 12 per cent. At that level the actual rate burden borne by industry on both sides of the Border should broadly correspond; and it is, of course, actual rate liability rather than the share of the burden which is of concern to industrialists.
Hon. Members may wonder what will be the effect of revaluation coupled with this Order on non-industrial property, that is commercial and domestic and so on. We do not know yet, of course, what the actual rate bills are going to be because authorities have until the autumn to fix their rates. I can say, however, that, as regards shares of the rate burden, the percentage burden for domestic property is likely to increase a little overall and the percentage borne by commerce to decrease slightly.
Members will no doubt have noted that while the 1965 Order applied for the whole of the valuation quinquennium which is just ending, the continuation Order I am now commending only applies for two years. This is so that the whole situation may be reviewed in the light of the likely effect of the 1973 revaluation on industrial rate burdens in England and Wales.
We are aware, of course, that to continue derating for industry alone means a heavier burden for other ratepayers, who also have to face increasing rate bills year by year. That is another reason why we want to look again at this order in two years' time. It is not a measure which should be in force permanently, but only so long as it can be clearly shown to be justified in relation to the rating burden carried by industry elsewhere. We believe that it is justified at


present, but we accept the view of the Anderson Committee on Commercial Rating that the whole question of the incidence of rating in Scotland should be looked at comprehensively in relation to that in England and Wales at the earliest opportunity, and the revaluation in England and Wales in 1973—the first for 10 years—will provide that opportunity. We shall also be better placed then to assess the effect of any changes in the rating system that may be proposed in the forthcoming Green Paper.
The assessors, who I know have been hard pressed in recent months, were able to provide revaluation estimates only a few weeks ago. In view of the obvious need to make the Order as quickly as possible, I regret that there was no time for formal consultations with the local authority associations and industrial interests. Announcement of the Secretary of State's intention was, however, made in answer to a Parliamentary Question on 7th April, and I am glad to say that no objections have been received.
I commend the Order to the House as a necessary short-term measure to distribute the rating burden in Scotland as fairly as possible.

8.30 p.m.

Mr. Tam Dalyell: Reverting to the point on which I interrupted the hon. Gentleman, I readily understand that, in the absence of any definite study having been done by the Department—not that I blame it—it is difficult to reach a conclusion. However, I offer as a fairly well-considered suspicion that the griping which some hon. Members have had from industrialists about the relationship between rating in Scotland and in England is largely justified. It would be interesting to have the figures. My suspicion is that they will reveal a situation where industry in Scotland is at a disadvantage compared with that in England.
The system of industrial rating should be considered afresh. It is an extremely unsatisfactory form of raising money. I am glad that the Financial Secretary to the Treasury is in his place, because I hope that, if we are to go in for an era of tax reform, the number of man hours involved in calculating industrial rates

as opposed to other forms of raising money, be it through the Exchequer or through local authorities will be reconsidered. It is a matter which drives the internal accountants of large firms almost to distraction. Any basic thinking that is done in the light of the Green Paper and the changes in local government will be welcomed.
I do very little special pleading in this House. However, on this occasion, I want to make a special plea for the kind of situation in which West Lothian finds itself. We have the dubious distinction of being the second highest domestically rated area in Scotland. Our position in the league is almost like that of Celtic, Aberdeen, Leeds or Arsenal. We are far ahead of anyone else. It is a situation which arises in any industrial county which, to its credit, has done an enormous amount of development in recent years— and we are grateful enough for having Leylands and the many other firms which have come to us—but it puts a tremendous burden on the individuals who live in such a place and who may not necessarily work there or work in the incoming industries. Therefore, there is a dilemma.
I happen to know that the Under-Secretary was at the Hewlett-Packard factory at South Queensferry earlier today. Had it not been for the expected statement on Rolls-Royce, I would have been with the hon. Gentleman. However, I ask him to exercise his imagination. When such a company comes to a community like Queensferry, an enormous amount of expensive infrastructure has to be provided in the way of sewerage, drains and roads. With the advent of Leylands, Dynamco and Cameron Ironwork, this has been very expensive in the Livingston area and West Lothian. For that reason, in any basic rethinking of the philosophy of industrial rating in the future, I hope that account will be taken of the dilemma in which West Lothian finds itself.
Some kind of equalisation is required. If it is considered to be good that development areas with a great deal of new industry should be concentrated in comparatively few places, some thought must be given to how the general burden of the common weal can be more fairly spread.
In making that point, I hope that I have the sympathy of the Department. In


the coming months, I look forward to hearing about its thinking and that of the Treasury.

8.35 p.m.

Mr. Dick Douglas: I am sorry to have to disagree with my hon. Friend the Member for West Lothian (Mr. Dalyell) on a basic point. I believe wholeheartedly that industrial derating is a hidden subsidy to industry. I argue that if it is to be the policy of the Government—any Government—to supply inducements to attract industry to particular areas, that should not be the responsibility of local revenues but should be the direct responsibility of the Exchequer.
We have only to look at the imbalance in terms of the proportion of the rate burden between England and Wales and Scotland to see the true situation. The hon. Gentleman mentioned that the contribution from Scottish industry as a proportion of total rate revenue was in the region of 12 per cent., and indicated that in England and Wales it would be about 14·7 per cent. I do not want to make the differences larger than they need be, but let us say that, roughly speaking, there is a difference in percentage terms of 2½ to 3 per cent. In terms of total revenue, therefore, Scottish industry on the present basis makes a contribution of about £3 to £4 million less than it would be making if, in proportionate terms, it were making the same contribution as occurs in England and Wales. In some authorities this is a considerable sum.
I agree with my hon. Friend when he made his constituency point since my constituency of Clackmannanshire has the dubious distinction of being the highest rated authority in the United Kingdom. This authority suffers a severe disadvantage in terms of the anomalies that can occur in industrial derating. I am sure that the Under-Secretary of State for Development is fully conversant with the background of the cases involved in assessing a particular industry on storage facilities for industrial purposes rather than for commercial purposes. I will not go into all the details, but anomalies occur because of the type of provision which applies to derating.
The Minister has clearly indicated that the idea is to look at the Green Paper which will come along presently, but for

which at the moment we have no date. One of the reasons for not making this a five-year Order is that the Government want to have an apportunity to assess the situation within the period of two years. This will produce considerable uncertainty. When I put down a Question on this matter on 28th October, the Secretary of State gave no indication that he would make any decision on industrial derating. However, in a television broadcast later in that week he announced that industrial derating would continue. There will be considerable uncertainty for this period of two years unless we seek a little further to find out what is in the Government's mind on the Scottish position as a whole.
Part of the anomaly of the Scottish system which leads to a maldistribution of burden among various sections of the community—and we are sorry to hear that the percentage for the domestic rate payable will go up—is involved in the transfer from rates to balance the housing revenue account. We are told in the Press, and from certain leaks which have taken place in the discussions, that the Government's intention is to remove any rate transfer on housing revenue account. That will mean that by that stroke—"at a stroke"—housing rents in Scotland will rise by at least 50 per cent.
If the Government are to use this to argue the case for an alteration of the rate, then it becomes very difficult for them to continue for any length of time. Having removed the rate subsidy from the housing revenue account—I am trying to read the Government's mind and it is become increasingly difficult to do that— it becomes increasingly difficult to sustain the 50 per cent, derating. My hon. Friend rightly probed the issue whether studies have been undertaken of the incidence of taxation and where the burden lies. We see great concern about the commercial ratepayer. This is particularly sorely felt in our cities. But the burden does not necessarily lie where it is put. It does not necessarily lie on the commercial ratepayer. It will be reflected in the prices charged to Scottish housewives for the goods and services they obtain from the commercial dealer, and might be reflected in changes in the structure of Scottish cities. The Government ought to study this matter. In view of the peculiarities of the Scottish system of local government finance, will the Green


Paper contain a special section dealing with Scotland? I should not be satisfied by finding a general survey of the sources of local government revenue without a particular survey dealing with peculiarities of the Scottish situation.
If the Order is to terminate in 1972–73, on behalf of Scottish ratepayers and even Scottish industrialists I say that we need a clear indication long before that time of the Government's intentions on local revenue. In 1962, the then Secretary of State—now the Minister for Trade—in answer to a Question, said:
In view of the outcome of the 1961 revaluation in Scotland the Government have decided not to proceed with the re-rating of industry in Scotland in 1963. The present intention is to include in early legislation provision for re-rating on the occasion of the next general Scottish revaluation, which is due to take place in 1966."—[OFFICIAL REPORT, 16th July, 1962; Vol. 663, c. 20.]
We have had this before and there may be good regional economic planning reasons and regional locational reasons to have it. It may be a good thing. But that burden in regional reallocation should not be placed on Scottish local authorities. It should be placed directly on the United Kingdom Exchequer, which is responsible for correcting regional imbalances.

8.43 p.m.

Mr. James Dempsey: I shall not follow my hon. Friend the Member for East Stirlingshire (Mr. Douglas) other than to say that I recollect my days as Secretary of the Labour League of Youth, when we advocated full rating relief for industrialists to reduce chronic unemployment in the distressed areas. We did that because we were convinced that there was no hope of the Exchequer accepting any responsibility for the financial obligation involved.
I am convinced that for as long as the present Government are in power—with the greatest respect to the Under-Secretary of State for Development—there is little prospect of the Exchequer effectively contributing towards inducing industrialists to enter certain parts of Scotland where there is very high unemployment. I cannot believe that the Government will make the appropriate and successful effort to solve the problem. This is why, to some extent, the burden to contribute

will be on the backs of local authorities in the competitive war for new factories.
It is unfortunate that industrial derating is to be pegged to 50 per cent. The Order will be approved, but I hope that the Minister will reconsider this matter. The mathematical ratio between Scotland and England in the matter of industrial derating is irrelevant. Scotland should relate its industrial rating to the efforts needed to attract industries to Scotland. To do that we need to be fully competitive. There is no prospect of growth-type industries which are situated near ports or near the main cities in the south moving to the north, because, if they were to do so, they would have to transport their raw materials up north and then move the finished product south. There would be an element of unviability in such a move.
We should consider what contribution we can make to encourage manufacturers to move to Scotland. I wish that the Minister had considered it in that way and said that, irrespective of the computation based on population and rates paid by industrialists, the additional cost borne by manufacturers in Scotland but not applicable to industries situated further south and nearer to the main centres of communication will be taken into account. That would be a much more sensible way of measuring the contribution to be made in establishing growth industries and factories in Scotland.
A great campaign is waging to establish a new steel complex in Scotland. To be competitive we must have a modern steel plant, but that is bound to result in the closure of older plants and in thousands of redundancies. Ideally the new modern steel plant must be accompanied by some growth industries and some ancillary industries to take up the redundant steel workers.
The ratepayers must make some contribution. As long as we must compete in a war for jobs, we must make every effort to ensure that we are the most successful competitors. There is nothing wrong in asking hoteliers, public houses, clubs and betting agencies to pay more rates so as to enable us to reduce industrial rates and to attract new industry to Scotland.
Another problem is that the buildings housing the old-established reputable


industries which have provided employment for half of century are falling down. No grant is available under the Local Employment Act for the replacement of such buildings. Unless we make a contribution in the form of rating relief by industrial derating, in addition to the problem of attracting new industries there will be the problem of replacing old industries. Whenever I meet industrialists in my constituency they make the plea, "Can you do something to reduce our rates?" That is a serious problem for industries which have been operating for the past 75 years. That is why industrial derating is necessary.
I would like the Minister to consider a suggestion that, in addition to the 50 per cent., local authorities be given discretion in the application of additional industrial derating subject to the employment situation in their areas. Even within Scotland there are towns—for example, East Kilbride—where until recently we had only a handful of unemployed. Because it is a new town, it has all the attractions imaginable for new industry—

Mr. Deputy Speaker (Miss Harvie Anderson): Order. I hope that the hon. Member will confine his remarks to the scope of the Order.

Mr. Dempsey: I am just about to explain, Mr. Deputy Speaker, how the scope of the Order would be much more effective if local authorities had discretion in the granting of rating relief additional to the 50 per cent, outlined by the hon. Gentleman. I am trying to point out that new towns have special attractions that the older towns—

Mr. Deputy Speaker: Order. I do not wish to bring the hon. Member's remarks to a close unduly quickly, but I would like to point out that the scope of the Order is as it is written before us and not as any hon. Member might wish it to be.

Mr. Dempsey: I am trying to point out again, if you will permit me, Mr. Deputy Speaker, that the scope of the Order is not sufficiently generous. That is a valid statement and, in my view, perfectly in order.
Having said that, I repeat that towns like Coatbridge and Airdrie, the older parts of the country, could attract industry only if some additional contribution

were made by the ratepayers. I should like the Minister to consider—

Mr. Douglas: May I interrupt my hon. Friend? I should like him to address himself to giving my constituency a little advice. How would he suggest that the ratepayers of Clackmannan and East Stirlingshire, whose rates last time were 41s. 6d. in the £, might be expected to give a little more contribution to the attraction of industry?

Mr. Dempsey: I could give them some good advice, but they would tell me to mind my own business and the Chair would rule me out of order. There are many ways of reducing rates other than cutting industrial derating. That is the last thing to think of cutting if my hon. Friend wants anything like full employment in his constituency.
Will the Minister consider, or will his Department study, the possibility of giving, say, a discretion to local authorities or giving them particularly generous facilities, legislation or provision, whatever it might be called, whereby they would be entitled, if they wished, to increase the amount of industrial derating beyond 50 per cent.? That is my plea because, coming from a constituency like Coatbridge and Airdrie, I cannot see any possibility of our breaking the back of the unemployment problem unless the financial inducements are much more generous than they are at present.
One of the effective ways of doing that would be for the Minister and his Department to study the practicality of local authorities, provided they are so minded, being given powers whereby they could be more generous than the 50 per cent, mentioned by the hon. Gentleman. He knows that local authorities have such powers concerning, for example, the relief of charities. Fifty per cent, is mandatory, but they have freedom to go beyond that figure.
I appeal to the Minister to consider extending that practice to industrial derating so that an additional contribution could be made, if a local authority regarded it as a wise policy to adopt, which would help to reduce the number of unemployed registered at our employment exchanges, especially at Coatbridge and Airdrie.

8.55 p.m.

Mr. George Lawson: We must all marvel at the courage shown by my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey), that he should advocate a change in the proportions of rates paid in different Scottish areas, as between householders, commercial and industrial subjects. I would not dare to do that in respect of my area. I am not sure that I can use the word "admire", but, as I have said, I marvel at my hon. Friend's courage. I know that he has been very concerned with bringing industry to his area, and I agree that few areas are more in need of industry than is the Coatbridge area.
I can suggest many ways in which local authorities can seek to attract firms to their areas and, having done so, can encourage them to expand. There are many services which local authorities can render, and I urge them to do so. I urge them to welcome firms to their areas and to be ready to meet the needs of those firms. They can do a great amount of good in that way. However, I hesitate to advocate shifting the burden of rates from industry to other ratepayers.
I want to touch on one point that very much concerns me, although even on that I hesitate to speak. When we talk about rates, the rate burden and the rating system, we usually preface our remarks by saying that it is very unfair system. We recognise that it is unfair, but we always have to admit that we have not yet been able to produce an easier way of raising as much money. No doubt on other occasions we can suggest ways in which present methods can be improved, but not on this occasion. I merely want to point out that in my constituency there is a heavy concentration of steel-making capacity.
Although the borough of Motherwell and Wishaw has a population of only about 76,000 people, it is an astonishing fact that two or three years ago the value of industrial subjects in that area was second only to that of Glasgow, an industrial city with approximately one million people. Edinburgh is not an industrial city but it has a substantial body of industry. Dundee is an industrial city, as is Aberdeen.
Until about three years ago the valuation placed upon industrial subjects in my constituency was greater than that

placed upon the industrial subjects of Edinburgh, with its 500,000 people. In the past few years there has been a slight shift, and Edinburgh may have moved slightly ahead, so that the value placed upon industrial subjects in that city is now slightly higher than the value in Motherwell and Wishaw. But it is still true that the borough of Motherwell and Wishaw, with a population of about 76,000, has an industrial valuation as near as makes no difference to that of a city with 500,000 people.
It might be seen as a certain disadvantage to my area that the rating system, from an industrial subject point of view, is based not merely on the bricks and mortar that go to make up the factories but upon the fixed equipment. If the fixed equipment consists of very heavy and expensive steel-making or steel-rolling finishing equipment, costing perhaps hundreds of millions of pounds, one can see an enormous rating burden arising. This is the situation. I believe it is fair to say that one particular works at Ravenscraig in my constituency is rated nearly as much as all the industry in Dundee put together. I am guessing at this, and I may be challenged, but I do not think I am far out.
There is no Exchequer equalization grant, as it used to be called. Certain burghs which I could mention were getting as much by way of Exchequer equalisation grant as Motherwell and Wishaw were getting out of this particular payment. I wonder whether, in view of the expensive fixed equipment which certain industries must carry, it is a sensible system to charge on the value of that equipment, which is the prevailing practice. This must have a very powerful deterrent effect on industries going to certain areas. We are pressing for this £1,000 million "green field" development. There is even a difference in the proportion of rates raised in Scotland as compared with Wales or parts of England, and this can be a very large factor in deciding where a particular industry will be located. It is bound to be a big factor in giving rise to second thoughts about still further developing—

Mr. Deputy Speaker: Order: I appreciate the temptations which are before the hon. Gentleman, but I hope he will return to the subject of the Order, and within


the scope of the Order, which he has left for some considerable time.

Mr. Lawson: I am sorry, Mr. Deputy Speaker. I cannot quite see where I am out of order. The Order relates to the derating of industrial subjects. I am describing industrial subjects. If a steel mill is not an industrial subject, I do not know what it is.
With a system of charging 50 per cent, based upon the value of the fixed properties, a very slight modification could make a substantial difference. If it were 40 per cent, in Scotland it could be a heavy disadvantage, whereas if it were 60 per cent, it could be a substantial advantage. It is the relative position that matters. Taking the point mentioned by my hon. Friend the Member for East Stirlingshire (Mr. Douglas), the charging of 100 per cent, could have an immense effect on whether a steel works developed or did not develop in that area.
There are other matters that we should keep in mind. I should like a close look taken at this question of how we charge and estimate industrial rates, so that we could perhaps find some way of compensating in areas where a new method is operating. Under a system whereby there was a smaller proportionate industrial charge in respect of an industry structured in that way, I should expect there to be a compensating payment from some other source, the, resources rate as distinct from what used to be called the Exchequer equalisation grant.
I hope that the Under-Secretary will think about it. There is bound to be a heavy discouragement against industrial development if one goes much beyond the bricks and mortar and charges rates on enormously expensive capital equipment. This is a factor which ought to have far closer and more sympathetic attention than it has had up to now.
It may be said that, in arguing in this way, I am in a sense arguing against my own area, but I am sure that my area would be happy if the industry within it —here I come to a certain point of sympathy with my hon. Friend the Member for Coatbridge and Airdrie—were made more secure than it might be under the heavy and growing charges put upon it as a result of the present system.

9.6p.m.

Mr. Peter Doig: It always sounds acceptable when someone is told, as is done under the present Order, that he can have something or get away with something. It is always popular to tell someone that he need pay only half his full rates, but it is popular only until people stop to realise that it does not reduce by a penny the amount of money which has to be raised for local government. If one group are told that they will pay only half their proper share of rates other groups will have to pay much more than their proper share.
How long are we to prolong this system? We employ expert valuation and rating officers to assess valuations, sharing out the burden of the money which has to be raised. Then the Government, whichever Government it may be, muck the arrangement about, saying to one group "You will not pay any rates", and to another group, "You will pay only half rates". The groups which are left, of course, have to pay very much more, so they begin to go out of business.
In streets such as Sauchiehall Street in Glasgow, one of the finest shopping-streets in Scotland, there are large shop premises empty, no one can afford to take them, and those who might take them are in the group who have to pay full rates. Then what happens? At the next revaluation, the expert looks at the properties again and says, "I must have been charging this commercial section too much, because people are going out of business. I shall have to reduce their share". In the end, nobody pays full rates. It becomes a farce.
When will the Government end this farce? When shall we have a reasonable system for the financing of local authority services? The anomalies of the present system become obvious when we consider Orders of this kind. In Bearsden, for example, there is practically no industry at all, in the constituency of my hon. Friend the Member for Motherwell (Mr. Lawson) it is nearly all industry, and there are wide variations in between which are bound to create unfairness. In agricultural areas, an enormous amount of property goes virtually free of rates. Someone is paying far more than his proper share. Why do we bother to employ experts, highly-paid scarce


assessors? Why do the Government bother to pay them, when at the end of the day everybody, including the Government, will muck up everything they have decided? Once they have parcelled it out fairly, the Government chop and change everything.
The whole system is out of date. Whilst I do not object to this Order at this time, how long shall we carry on the farce of the present system, which everyone knows is wrong? I could give a practical alternative now, but I presume that I should be out of order if I did so.
We keep chopping and changing the system because it is faulty. A wrong impression is given to people. If an industrialist is making up his mind whether to build a steel strip mill in Motherwell, Wales, London, or elsewhere, at the back of his mind is the niggling thought, "If I go to Motherwell I shall be derated 50 per cent., but how long will it last?". He thinks that when the system is eventually changed he will have to pay twice as much in rates. That is not so, because if industry in a highly industrialised place like Motherwell were to pay full rates on its premises, it would not pay anything like double what it is paying now with 50 per cent, derating.
We must sort the muddle out one day. I hope that Governments will not bring Orders like this before us ad infinitum, but will one day get down to devising a proper system for local authority finance. Why on earth they excluded the matter from the Wheatley Commission's terms of reference, I do not know.

Mr. Deputy Speaker (Miss Harvie Anderson): Order. The hon. Gentleman, who was not present at the beginning of the debate, has gone far beyond the scope of the Order. I do not think that the hon. Gentleman can have heard the Minister's speech.

Mr. Doig: I will end by repeating that the system gives a wrong impression to industrialists and could frighten them away, because they do not understand what the abolition of 50 per cent, derating would mean. It would not mean doubling their present rates, and it is time someone made that clear. I think that at the back of their minds is the fear that if they come to places in Scotland, like Motherwell, Glasgow, Edinburgh or

Dundee, they may be faced at some time with a doubling of the amount they must pay in rates, but that is not the case.

9.13 p.m.

Mr. Norman Buchan: I had not intended to speak tonight, but the debate has ranged fairly widely, within the bounds of order, and it might be useful if I say a word or two. Some of the disquiet expressed is based on two old factors in the rating system. First, there is the general feeling that it is a highly regressive form of taxation. No one has yet come up with the alternative, although plenty have been advanced. I am disappointed that there is no suggestion that this is the last of the rating Orders, and that something more progressive has not been introduced. Second, there is disquiet that as an indictment the provision is not particularly effective— the comparison between the 12 per cent, in Scotland and the 14·7 per cent in England is a very small inducement—and in any case is remains an anomaly.
We have a kind of Samuel Smiles situation, a self-help situation, and in the areas we are asked to help, which require the right kind of industrial investment, with incentives given to industrialists, there is a double Samuel Smiles situation. Not only within the depressed areas as a whole, but in those parts of them where we require industry because people are out of work, those very people will have to bear the burden of extra rates because of the 50 per cent, reduction.
We are, therefore, in the peculiar position of seeing all sorts of theoretical and practical flaws in the system but saying that, because we have not produced the right kind of generating regional policy, we need to keep it, regressive as it is. However, if we got the right kind of dynamic regional policy, this system could appropriately be examined and perhaps, at some future date, rejected. My hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) recalled that, a few years ago, the Labour League of Youth advocated 100 per cent, reductions. That was pushing the Samuel Smiles principle to the uttermost because nothing else was coming forward. We should clearly be moving beyond that stage now.
With reform of local government in the offing, I am disappointed that we were


not told that this will be the last such Order. We have urged industrial rating incentives and some of us have detected anomalies. As Under-Secretary of State, I brought in 50 per cent, derating of agriculture in relation to intensive farming, pointing out that if it was not agriculture at least it was industry and therefore deserved 50 per cent, derating. But, of course, this created anomalies in the rest of Britain. We are, in effect, calling upon the rate bearing communities to carry what should be an Exchequer form of direction of planning, because, by this system, we are removing planning from local government. That is an important aspect to Scotland because of the unemployment there, which is now over 123,000.
Scotland, therefore, is crying out for the right kind of development incentives. This is not a party political point. A large part of the Tory Party in Scotland is calling for a return to investment grants and for getting rid of the nonsense in the Chancellor's Budget. If that were done, the Order would no longer be so important. I hope that the Under-Secretary of State will tell us that, while we must have this rather regressive situation because of the failure to develop proper regional policies, the Order will run for only two years and at the end of that time the Government will give proper regional incentives so that we can get rid of the desperate unemployment in Scotland.
The demand for investment grants is being powerfully voiced by a large section of the Scottish Tory Party. I hope that, when its conference comes in a week or two, the Government will see the error of their ways and accept that point of view. In that case, the Order will no longer be quite so necessary. It is the incentive and unemployment situation that we require to pay attention to.

9.18 p.m.

Mr. Younger: By leave of the House, Mr. Deputy Speaker, I will reply to this interesting debate. It sounded, at times, more like a trailer for the debate on the Green Paper which we expect to publish later this year on local government finance.
I will not stray into discussing the wide and interesting points raised by several hon. Members as to what might replace the present rating system or what major improvements one might make in it but

will confine myself to saying that I noted the points with great interest and look forward to hearing more about them in the debate on the Green Paper, which will be the time for these ideas to be properly deployed. I hope then that we shall have an opportunity of taking a major look at the whole system of rating and how other possible systems of financing local government might work.
The debate is essentially—and the hon. Member for Motherwell (Mr. Lawson) put this concisely—about the balance of rating expenditure carried by each individual category of rated subject. If one reduces the percentage carried by one category, one inevitably increases the percentage carried by one or more of the others. We are dealing tonight with a global total which remains constant, and we are discussing the splitting of its subsections and the various parts of the burden. Therefore, those who may advocate, quite properly, that we should have industrial derating are advocating as a result that there should be an increase in the rate burden on commercial, or domestic, or other subjects.

Mr. Douglas: That does not necessarily follow. As I indicated in my remarks, the major element of disequilibrium in Scotland relates to the transfer in the housing revenue account. The Minister intends to remove that. If he does, he will alter an important percentage in the total.

Mr. Deputy Speaker: Order. I hope that the Member for East Stirlingshire (Mr. Douglas) will not lead the debate out of order yet again.

Mr. Younger: Perhaps I was too generous in giving way to the hon. Gentleman, because he strayed a little out of order and into another aspect of the problem which I was about to explain. We have, first, the balance between the categories I have described and, secondly, although it does not strictly come within this Order, to consider the actual amount of rates paid in these various categories, and they are not the same thing.
It is no use saying that the rateable value of a subject is so much and that that is bad or good, without relating it to the actual amount of rates which have


to be paid at the end of the day. This is where the comparison between Scotland and England becomes so difficult. One has to take into account not merely the inevitable differences in practices of the assessors in the two countries, although they are supposed to be the same, but the different rating burdens of Scottish and English and Welsh local authorities, which are affected by substantial differences in policy and so on.
I give one further figure which adds to the rather crude figure I gave earlier comparing Scottish and English effects. One may calculate a figure of rates paid on every £1,000 worth of sales in a commercial undertaking. This measures in a certain rough and ready way the actual amount of pain caused to ratepayers. The estimated figures for rates per £1,000 sales in manufacturing in Scotland show that, with derating at 50 per cent., Scottish industry already bears a slightly higher rate burden than industry South of the Border. The figures are £6·87 per £1,000 sales in Scotland compared with £6·21 per £1,000 of sales in England and Wales. It may not be a substantial difference, but it is not negligible.
We have several different things to consider: first, the balance between the various categories of subject; secondly, the difference between the rateable value practices between the two countries; thirdly, the difference in the actual rates paid at the end of the day, which is affected by the matters which I have outlined.

Mr. Buchan: Surely this myth of concealed assistance to industry in Scotland as opposed to the rest of the United Kingdom is exploded and this makes it more necessary to bring forward the right kind of investment grants?

Mr. Younger: I do not want to stray out of order. Perhaps I can now refer to the point raised by the hon. Member for East Stirlingshire. The figures I gave earlier of different percentages for the rate burden carried by industry in England and Scotland, which have to be modified by this other figure—which is only a sample figure—show that in that case the figure was in favour of one side of the equation and in this case, if we take the per £1,000 sales rates paid,

it appears that Scotland is on the worse side. Generally speaking, we have come to the conclusion that on balance, taking into account all the difficulties of the system and the differences between the two countries, it is not far out.

Mr. Lawson: Could the hon. Gentleman carry that interesting example of the £1,000 sale rate further and tell us how this might work out between different industries, for example the steel industry and other industries?

Mr. Younger: I am grateful to the hon. Gentleman for raising that point but I am afraid that I cannot give such a complicated calculation without notice. No doubt it is something that we could pursue with great profit at a later stage.
The hon. Member for Motherwell also raised a point with which I have much sympathy—the question of how we can make more readily understandable the methods by which such things as industrial plant are valued. I must be careful not to trespass beyond the bounds of this Order or into what is essentially the task of the assessors. One thing we cannot do is to start taking on the job of amateur assessors. The C.B.I, has made representations, fairly similar to those of the hon. Gentleman. We are considering this carefully and we will also consider what the hon. Gentleman said. [Interruption.] If the right hon. Member for Kilmarnock (Mr. Ross) wishes to intervene I shall be glad to give way but he might have found it of profit to have been here at the beginning of the evening to hear what I said.

Mr. William Ross: The hon. Gentleman should know exactly where I was. If he reads his local paper he will know. It was not a very pleasant job. He said he would consider this and I ask him, having considered it, what does he propose to do about it?

Mr. Younger: I think that I will continue with the debate that we were having before the right hon. Gentleman came in. I want to reply to some of the points raised by his hon. Friends.
The hon. Member for West Lothian (Mr. Dalyell) raised the question of comparisons with England and the heavy burden on his own local authority of West Lothian. I can well appreciate the anxieties which this causes. As for


the help for bringing in services, etc., for new factories he will know that there is some element of help for local authorities in the rate support grant, so that it is not a total burden on the local authority. I accept that a local authority which follows a progressive policy in trying to make itself attractive to industry faces this problem in spite of the available grants. This is one of the things we shall be looking at in the reassessment of the whole rating system which will come when the Green Paper is published and discussed.
The hon. Member for East Stirlingshire said that he thought the renewing of this Order for only two years would produce uncertainty in industry. I see the point but I do not feel that industry need have any feeling of uncertainty. I want to make it clear that the reason for the two years is not to make some shattering change but merely to leave the way open for any reconsideration which may appear necessary in the light of the Green Paper and consideration of it. There is nothing more sinister than that in the figure of two years.
The hon. Gentleman mentioned discussion which he and my right hon. Friend the Secretary of State had some months ago. I do not see any difference in what my right hon. Friend said then and what we are doing now. The hon. Gentleman asked him whether he was proposing to cancel industrial derating and my right hon. Friend answered, "No, we have no plans for that". He had no plans for it then and it appears that, having gone through all the processes, he has come to the decision not to cancel industrial derating. There does not seem to be any conflict here.

Mr. Douglas: I asked the Secretary of State what was his policy regarding the continuation of 50 per cent, derating of Scottish industry and the right hon. Gentleman said that he had no announcement to make. What I objected to was the fact that he made an announcement on television two or three days later.

Mr. Younger: I do not think one could count an answer to a simple question on television as an announcement when the question was, "Are you going to do something?" and the answer was, "I have no plans for that". Nobody could seriously call that an announcement. If that were the case, some very peculiar

announcements have been made by many people on many occasions. Therefore, I do not think the hon. Gentleman's point was valid.
The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) raised some interesting new ideas which I hope he will deploy at greater length in the debate on the Green Paper. His suggestion that local authorities should be given the opportunity to give more than 50 per cent, derating out of their own pockets when they thought that industry needed it was new. However, I do not think that many local authorities would fall over themselves to have a power of that sort. It would be an expensive power for their general ratepayers. I will look carefully at what the hon. Gentleman said, but my first reaction is that it is possibly something which might not prove to be very practicable.
The hon. Member for Motherwell raised the question of valuations on some subjects in his constituency about which we all know as being exceptionally large producers of revenue. He said that the industrial valuation of his constituency approximated to that of as large a city as Edinburgh, which is an interesting and surprising fact. I cannot give the hon. Gentleman any magic solution off the cuff, because it all comes back to the question of leaving the valuation to the assessors and their technical and professional expertise. We must leave the matter there for the moment, but we shall consider it in the debate on the Green Paper. That is the time when it should be considered in the widest possible way with the most critical eye.
The hon. Member for Dundee, West (Mr. Doig), who said that it was the balance between the categories which was important, made some interesting points. I am sure that he could make them with profit in a speech on the Green Paper.
We have had a wide-ranging debate. My hon. Friend the Financial Secretary has been able to listen to it. Anything to do with a review of local government finance is naturally of great interest to him. For a considerable number of years he was responsible for the rating problems of a large industrial concern which, he tells me, had factories in Scotland, England and Wales. He says that there is no doubt that more headaches were


caused by rating in Scotland than were caused in the other two countries.
I commend the Order and hope that the House will pass it.

Question put and agreed to.

Resolved,
That the Rating of Industry (Scotland) Order, 1971, a copy of which was laid before this House on 23rd April, be approved.

Orders of the Day — MINES AND QUARRIES, SCOTLAND (RATING)

9.34 p.m.

The Under-Secretary of State for Development, Scottish Office (Mr. George Younger): I beg to move,
That the Valuation (Mines and Quarries) (Scotland) Order, 1971, a copy of which was laid before this House on 23rd April, be approved.
This Order is similar to one applying to England and Wales which was approved by the House on 29th March. It gives effect, in relation to valuation for rating in Scotland, to the changed view now taken of what a mineral royalty represents. Until recently these royalties were regarded as being wholly in the nature of a rent; and they were treated both for national taxation and local rating purposes wholly as income of the mineral owner. A royalty for the extraction of minerals is, however, partly a capital payment for the material removed as well as a rental payment for the occupation of the land. This was recognised in relation to income tax, surtax and corporation tax by the Finance Act, 1970, which provided that for those purposes mineral royalties should be treated as being half a rent and half a capital payment. The last Administration announced that they intended to make a similar adjustment of the basis of assessing mineral subjects to rates, and we have decided that this is a proper course to follow.
The House will be aware that, for rating purposes, the annual value of property is based upon the rent which it may be expected to command. In pursuance of that principle a mine or quarry has hitherto been valued largely by reference to the royalty paid, or which could be expected to be paid, for the

extraction of minerals from it. Now that the royalty is to be regarded as having only a 50 per cent, rental component the Order brings this into effect, quite simply, in Article 4, which provides that in arriving at the annual rent or value of those mineral properties the element of value attributable to the right to win and work minerals is to be reduced by one-half. The element of value relating to buildings, plant and machinery will be unaffected by the Order. In common with the rest of industry in Scotland, mines and quarries will continue to be eligible for industrial derating, which will be effected by applying the derating percentage to the annual value arrived at in accordance with the Order.
The financial effects of the Order on local authorities will be small. If the Order had applied in the current year the overall reduction in the valuations of mineral properties would have been of the order of £300,000, or about 0·2 per cent, of the aggregate Scottish rateable value. Because of the compensatory effect of the resources element of rate support grant, the additional burden on other ratepayers will be widely spread. However, in order to make the transition gradual, the Order provides for a reduction limited to one-quarter of the royalty part of the annual value for the first year, 1971–72, increasing to one-half from 1972–73 onwards. On top of that, as I have said, 50 per cent, industrial derating will apply.
The Order was drafted after consultation with bodies representative of mining interests and the local authority associations. The local authorities deprecated the further erosion of the rating base which the Order represented but we told them that, standing the decision already reached about mineral royalties in relation to national taxation, the Government regarded themselves as committed to the Order.
I commend the Order to the House. It introduces an equitable principle of taxation, already approved by Parliament, into the field of rating, and although its effect on local government revenue will be small, and on individual authorities hardly discernible, it will do something useful for the mining industries in Scotland.

9.38 p.m.

Mr. George Lawson: I have only a question. This Order relates to the rateable value of mines and quarries. The question in my mind, and, I am sure, in the minds of my hon. Friends, is, why just mines and quarries? Why not all those broad acres of land, so rich in Scotland? Why not? We have been arguing about the burden of rates and of different proportions of rates. I do not want to use strong language, but, really, it is a crying scandal that we have this little measure dealing with mines and quarries when there are all those acres crying out to be treated likewise. That they are not is a grave omission. Perhaps the Under-Secretary would like to take the Order back and have it amended, or else—although it would be a very poor second best—put in the Green Paper provisions about bringing into rateable value, on which so much depends, those broad acres not only of agricultural land but of much else besides, in order that they, too, may play a part in meeting the cost of the very expensive services which are regularly rendered to their owners or occupiers.

Mr. Younger: With the leave of the House, perhaps I might thank the hon. Member for Motherwell (Mr. Lawson) for his usual beguiling intervention, though he sought to draw me far beyond the bounds of rectitude in discussing an Order of this sort.
The Order deals with a problem of the mining industry, and it is not open to me to go further at this stage. No doubt the hon. Gentleman will expand his argument in forthcoming debates on the Green Paper.

Question put and agreed to.

Resolved,
That the Valuation (Mines and Quarries) (Scotland) Order, 1971, a copy of which was laid before this House on 23rd April, be approved.

CORPORATION TAX

Ordered,
That a Select Committee be appointed to consider the Green Paper on Reform of Corporation Tax (Command Paper No. 4630) and to report thereon:

Ordered,
That Mr. Peter Archer, Mr. Kenneth Baker, Sir Tatton Brinton, Mr. Eric Cockeram, Mr. Denzil Davies, Sir Henry d'Avigdor-Goldsmid, Sir John Foster, Mr. David Marquand, Mr. Peter Rees and Mr. John Roper be Members of the Committee:

Ordered,
That ihe Committee have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place and to admit strangers during the examination of witnesses unless they otherwise order; and to report Minutes of Evidence from time to time:

Ordered,
That four be the Quorum.—[Mr. Whitelaw.]

Orders of the Day — SCOTTISH AFFAIRS (SELECT COMMITTEE)

Motion made, and Question proposed,
That a Select Committee be appointed to consider Scottish Affairs:
That Mr. W. H. K. Baker, Mr. John Brewis, Mr. Dick Douglas, Sir John Gilmour, Mr. Hamish Gray, Mr. Robert Hughes, Mr. George Lawson, Mr. Ian MacArthur, Lieutenant-Colonel Colin Mitchell, Mr. James Sillars, Mr. John Smith, Mr. Iain Sproat, Dr. Gavin Strang and Mr. Patrick Wolrige-Gordon be Members of the Committee:
That the Committee have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place and to admit strangers during the examination of witnesses unless they otherwise order; to report from time to time, and to report Minutes of Evidence from time to time:
That six be the Quorum:
That the Committee have power to appoint persons with expert knowledge for the purpose of particular inquiries, either to supply information which is not readily available or to elucidate matters of complexity within the Committee's order of reference:
That the Committee have power to appoint two Sub-Committees each consisting of not more than eight Members and to refer to such Sub-Committees any of the matters referred to the Committee:
That every such Sub-Committee have power to send for persons, papers and records; to sit notwithstanding any adjournment of the House; to adjourn from place to place; to report to the Committee from time to time; and to admit strangers during the examination of witnesses unless they otherwise order:
That the Committee have power to report from time to time the Minutes of Evidence taken before such Sub-Committees and reported by them to the Committee:
That Three be the Quorum of every such Sub-Committee.—[Mr. Whitelaw.]

9.42 p.m.

Mr. Tam Dalyell: As one who has always wanted the scrutiny of this House to be furthered by the success of Select Committees, I confess that I am disappointed at the impact that the Report of the last Select Committee on Scottish Affairs had in Scotland. I say that rather sadly. We should not deceive ourselves. What was hoped for from these Committees has not materialised. I do not believe that any hon. Member in his heart of hearts thinks that Select Committees have mattered very much outside this House.
I am not to serve on the proposed Select Committee. I have no recriminations against those who chose its members, and I make no personal complaint. However, if one wants an effective Select Committee, I think that here is the point at which television should be introduced.
When the subject of television arose on a previous occasion, I was sad that it was not seen fit to carry out some experiments. On the other hand, if the full House were televised, it may be that after a few weeks it would turn into a crashing bore. I can see all sorts of reservations about the House being televised, continuously or selectively. But surely the intimate cross-questioning of a Select Committee lends itself to television.
I take this opportunity to say to the Leader of the House—and I have no personal axe to grind—that I feel the time has come once again to look seriously at the possibility of televising these Select Committees. I can think of many confrontations which would have made fascinating television. For example, if the Public Accounts Committee had been more open when I was a member of it, I can think of all sorts of witnesses from the Departments, where no commercial secrecy was involved, when television treatment of the proceedings would have been of extreme educative value.
Under the chairmanship of my right hon. Friend the Member for Huyton (Mr. Harold Wilson), or my right hon. Friend the Member for Sowerby (Mr. Houghton), or indeed the last Chairman, the one under whom I served, the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), the proceedings on many occasions would have been extremely interesting. This also applies to the Select Committee on Science and

Technology, and many of my hon. Friends will be able to instance other Select Committees. The examination of many eminent witnesses would have been educational and, in a deeper sense, would have added to the prestige of the House.
Far too often Select Committees of this House have turned themselves into Royal Commissions. But they are not Royal Commissions. One or two Select Committees—I will not name them—have dragged on for one, two, or even two-and-a half years, and their reports have not even been debated. I do not blame the Leader of the House for this, but I would ask what has been the end-product of all this work. For what reason have busy people been brought from Whitehall and industry to give evidence before those Select Committees? Certainly there should have been some end product.
My hope for this Scottish Select Committee is that two things will happen. First, I hope that the Committee will exclude consideration of a general survey of Scottish economic affairs, since that is not the business of a Select Committe but is a matter for debate in the House of Commons. The second hope is that the work of the Select Committe, if it is to be useful, must be topical. Therefore, there should be a time limit upon its activities and I should like to see a time limit of months, not years. Instruction should be given to the Committee to report back to the House within a certain time. If these things are done—and the evidence would then certainly be more topical—I believe that the Committee's work will be taken more seriously. Then the Leader of the House would no doubt see that its reports were debated by the House.
One of the saddest things to happen as a result of a Select Committee's work is that when its report is debated in the House very few hon. Members attend. The Financial Secretary to the Treasury knows that over the past few years when the House has been discussing reports of the Public Accounts Committee the attendance has been no credit to this House. The reason for this low attendance is that all the material is stale by the time it is in print and, after all the due processes have elapsed, the House is faced with discussing what has happened two years earlier.
If Select Committees are to be as effective as I want them to be, then let them


be topical. I hope that the Select Committee on Scottish Affairs will choose subjects which are topical. I hope also that it will report within a short period of time to enable Parliament to pass an opinion on any findings so that this may have some effect in the outside world. Far too often Select Committees get precisely nowhere.

9.48 p.m.

Mr. George Lawson: I disagree with a great deal of what was said by my hon. Friend the Member for West Lothian (Mr. Dalyell) since I feel that he takes a wrong view about the work of Select Committees. He spoke about the impact of this work upon the House. One must remember the last massive document which was produced at the conclusion of a Select Committee's work which contained both the evidence and the findings of the Committee.
These are all-party Committees, but it should be said that the document could have been much sharper if it had been produced, for example, by members on only this side of the House. We should have had marked views to express on various things, but the difficulty is that it would not have been an agreed report. As far as we can, we have to reach agreed reports. A Select Committee is not primarily designed to have an impact on the House. One of its basically important functions is that it can investigate and carry its scrutiny into Departments of State, for example, for which there is responsibility, much further than would be possible on the Floor of the House.
The Public Accounts Committee or the Estimates Committee, for example, were not brought into existence to have an impact on the House in the sense of reaching the headlines. The purpose was to enable the Member of Parliament the better and more effectively to carry out the function of scrutiny. Perhaps we might see this as one of the most important rôles of the House, as distinct from the Government. I should like to see the power of scrutiny extended and improved in many ways. But the first purpose of this Committee and like Committes is to enable the individual member to delve much more deeply and closely into the manner in which all Government Departments function.
On the first functioning of the Select Committee on Scottish Affairs, we took

in almost the whole range of Scottish governmental activity. That was far too big at the time, but we were well aware of the very large bite we had taken, and that we had bitten off a bit more than we could chew. Nevertheless, I suggest that if anyone wants to look closely into the manner in which the administration of Scotland functions, the different aspects of it and the Government Departments which have a bearing on Scotland, he can derive great profit from the evidence given in our report.
On the question of the impact, I had not intended to speak in this way but my hon. Friend has provoked me.

Mr. Dalyell: To be fair, I talked about the impact outside the House of Commons, and not inside the House.

Mr. Lawson: Inside or outside the House—and it is not my impression that the primary function of a Select Committee is to have an impact outside the House. As I have seen the function of the Select Committee, it is one to enable Members of Parliament the better to carry out their job. If they find, for example, that something is materially wrong, they can have an impact. When they discover something that ought to be put right, they can headline it and have an impact. But let us suppose that they do not find anything very wrong and that Departments are working wonderfully smoothly: that has no news value or impact outside the House, but it could be a very useful service and a means of helping Departments to function smoothly. It might be a means of keeping Departments on their toes.
When I was a member of the Select Committee, we thought that we might have an impact if we met in Scotland, and there was a great deal of talk about sitting in Scotland. We went to Edinburgh A great deal of publicity was given to that first visit. A member of the Press turned up, but not many of the public. We had quite a number of meetings in Scotland. We went as far as Inverness. But our experience was that public interest dwindled and dwindled. I remember one occasion in Glasgow on which two journalists turned up, obtained the evidence which one organisation was to submit, and cleared off without even listening to the evidence submitted and


the questioning which flowed from it. They got the story and that was all.
On many occasions, when the Committee sat in Scotland, a great deal of valuable cross-examination was conducted, but it was often sufficient for the Press to have some headline only. Very little effort was made to inquire into what was being done. I do not blame the Press. Its job is to get a story. The more striking the impact, the easier the job.
The great difficulties under which such Select Committees labour should be recognised. This is not to say that we should not seek to overcome the difficulties. If a Select Committee is effectively to cross-examine witnesses, at least one of its members must do a great deal of preliminary thinking about the central issues. The close questioning of experienced witnesses is a highly-skilled job. Even some of our more senior judges are not all that good at bringing out the best that can be got from witnesses.
I compliment the Leader of the House on continuing the practice of enabling the Committee to bring in some skilled person or persons apart from the Clerks of the House, who do an invaluable job. The previous Select Committee was able to call in an economist, who did useful work. This Select Committee is to be given the same power.
Let us not bite off as much as we sought to bite off last time. We must spend a great deal of time thinking about how we can derive the greatest benefit from our work. It is up to the members of the Committee. If the Committee fails, it will be the fault of its members. We shall have a sufficiency of power. If we are prepared to make a continuous effort, the power is there for us to make the Committee an invaluable instrument of keeping a close eye on how the different Departments function in Scotland.
It has taken the Leader of the House a long time to set up this Select Committee, but I again thank him for doing so.

9.58 p.m.

Mr. Norman Buchan: I should like to congratulate the Leader of the House, but I am not sure that I can. I am pleased that he is setting up the Select Committee, but I want to raise

one or two points. I know nothing about the usual channels, but I believe that there is a certain meanness about the selection of the 14 names. Six of them are excellent, and I have no quarrel about them. However, I think that the whole House would want the membership of a Committee such as this to be broadly based. It is true that the Committee's function will be to scrutinise, but it should do so from different points of view. I believe in democracy. I believe that our case is right and that the wider the discussion the more chance there is that our case will win.
I therefore regret the fact that there is to be no representative of the Liberal Party on this Committee. I also regret that no Liberal Member is present for this debate tonight.

Mr. Lawson: They do not want to be represented.

Mr. Buchan: Whether they do or not, we should try to persuade the Liberals that they have something to offer. That is why I regret that no member of the Liberal Party is present for this debate. Given the chance, the Liberals might well have agreed to one of their members serving on the Committee. The Scottish Nationalist certainly wanted to serve on the Committee. As there is so much to be done, I should have preferred all parties to be represented on the Committee.
That is my only reason for being hesitant about congratulating the Leader of the House, because I always like congratulating him. Secondly, we may be over-critical of what was achieved by the last Select Committee—

It being Ten o'clock, the debate stood adjourned.

Ordered,
That the Motion relating to Scottish Affairs may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Speed.]

Question again proposed.

Mr. Buchan: The last Select Committee achieved a good deal. For the first time, we began, at least in the early stages, to see a scrutinising Committee of the House beginning to be reflected in the Press outside. There is always a difficult relationship between the Press and Parliament. If the Press prints what


we have said, we blame it. Sometimes when it does not print what we say, we blame it, too. In other words, very often the fault in this is ours.
It is true that the last Select Committee went on for a long time, but it covered a good deal of ground. I do not think that what was important quite got through in the Scottish Press handled north of the Border in the same way as it did in the Scottish Press handled from this House, but it was beginning to break through. Things went wrong. One Member told the Press that she was coming up in a tangerine dress. Sure enough, that was all that was reported that day.
I wish to back up the valuable suggestion by my hon. Friend the Member for West Lothian (Mr. Dalyell) concerning television cameras. We have a peculiar situation. The Crowther Committee was televised, I thought, effectively. I saw excepts of one or two of the sessions. Nobody suggests that we should have a large Committee session shown on television, but there is no reason why a short, edited version should not be shown, as the Crowther Committee was shown effectively on the northern news bulletin. I believe that the Select Committee's visits to Scotland accompanied by that kind of extract on the news bulletin would build up the concept of Parliament being something more than meetings in the Chamber here. It would be a useful opportunity for experimentation.
It seems to me valuable that instead of giving the Select Committee such a wide remit as the last one had, we should narrow its remit. It could be more effective in scrutinising and, at the same time, meeting what I regard as the greatest lack in parliamentary life—that is, the contact between what goes on here and outside. We could have a revolution on the Floor of the House of Commons and it would not touch the perimeter of the Palace of Westminster. We must make contact, and this is one of the ways that we can do it. We need scrutiny, therefore, over the short period, not a searchlight, more a laser beam—in other words, close, detailed scrutiny which, I am sure, would get the right kind of response.
I hope that the Leader of the House will reconsider the composition of the Committee. I hope that there will be wide consultation on the remit which is given to the Committee and I hope, thirdly, that he will consider the possibility of television cameras on the Select Committee. It seems to me that we spend too much time talking about the holiness of the Floor of the House. I accept its sanctity, but we could sometimes add to it by the perimeter work of the House of Commons. The Committees can add to the value of our debates here. More importantly, they could have a life of their own in doing their important job of, first, scrutinising and, secondly, taking Parliament outside the Palace of Westminster so that people can feel, "Yes, it does belong to us."

10.4 p.m.

Mr. William Ross: I am glad that I managed to get back from Ayr in time to participate in this debate. I am sorry that the Under-Secretary had to question my absence. I was at the funeral of one of his more distinguished constituents, a very dear friend of mine and one of the finest public-minded people that Ayr has ever known.
I express my thanks to the Leader of the House. We pressed him and we questioned him. He used a wide variety of replies in giving us the same answer every time. I do not know exactly what his difficulties were. It might well be that certain other Committees were rather prolonged and his people were suffering from overwork. At any rate, here it is. It is rather late in the Session, and I do not think that we can expect very much to be done by it during this Session.
Much has been said about the width of the remit. My hon. Friend the Member for Renfrew, West (Mr. Buchan) suggested that the remit was too wide—unless I have misinterpreted what he said. In my opinion the remit must be as wide as possible to allow full freedom to the Committee to decide into what matters it wishes to inquire.

Mr. Buchan: I am sorry, but my right hon. Friend has misunderstood what I said. I was saying that the last remit given was too wide in its scope, and that if it had been fragmented, with one or two remits given in succession, subjects might have been covered much more effectively.

Mr. Ross: It was deliberately chosen for Scottish affairs. We did not want to narrow it to the Scottish Office, because much that is done in Scotland is done for the good of Scotland by other Departments, including the Treasury, the Department of Trade and Industry, the Department of the Environment, and the rest. We depend entirely upon the Committee to decide where it wants the searchlight of inquiry to fall.
It was understandable on the last occasion—taking into account the situation which then existed in Scotland—that there should be no evidence of narrowing the remit. Indeed, the decision of the Committee was to go into the wide question of industry in Scotland and the ways in which it could be helped. Unlike some people, I believe that an excellent opportunity was thereby provided for people to bring out the extent to which Scotland was being looked after by various Departments of Government, and it gave every member of the Committee an opportunity to probe even further and make other suggestions concerning Scottish affairs.
I have always regarded Select Committees as an extension of the House at Question Time. It is wrong to compare Select Committees of this House with Select Committees in other countries. In the United States they are set up for the purpose of creating a bridge between the executive and the legislature. In this country we do not need that, because we have the executive and the legislature in one place. The Ministers come here. The Prime Minister must answer every Tuesday and Thursday, as must the Secretary of State for Scotland, in his turn. The Select Committee is an extension of the process of probing—of taking up some matter and going through with it to the end.
I agree that it can be most effective if it is fairly narrow in its inquiry. My hon. Friend the Member for Motherwell (Mr. Lawson) wanted the Committee to inquire into the steel industry in Scotland. There is no doubt that that could be done much more effectively with a proper remit. We can think of many useful subjects on which the Committee might light. But the effectiveness of its work depends upon the Committee itself. To some extent Select Committees are on trial, and there success will depend upon the use made of them. I am speaking not from a party

political point of view but in terms of the position of the Government and their efficiency, and the efficiency of Ministers and civil servants.
My hon. Friend the Member for West Lothian (Mr. Dalyell) spoke about television. If he told the television authorities that they could come here I doubt whether they would, unless they were satisfied that there was a story, or something rather dramatic. It would do many people good to be able to appreciate the quality of our civil servants. There is no doubt that when the Royal Commission was televised one of the outstanding features was the quality of the answers and the agile minds of the civil servants in Scotland. We are very well served by our civil servants. But that is on the fringe of the matter, and beside the point.
The power of the Committee to search into every corner of the Administration— the Scottish Office, Trade and Industry, the Treasury—as it affects Scotland, means that a power is given to the backbench Member which he had never had before. Whether they use it wisely, and the extent to which they use it at all, will determine its success and indeed the attitude of mind of the Leader of the House as to whether he wants to continue with it. But I think he is wise in continuing this for another year, and I hope he will give it the power to carry on whatever investigations it requires in this short part of the Session and into the next Session. I thank the right hon. Gentleman for what he has done.

10.11 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): My hon. Friends and I fully appreciate the reason why the right hon. Member for Kilmarnock (Mr. Ross) was not here before. We fully understand the circumstances which he mentioned.
The right hon. Gentleman has questioned the fact that we are setting up this Committee rather late in the Session. I agree with him. I respond at once to what he has said; I certainly hope that any inquiries which this Committee may have started will be continued in the next Session, and I should like to make arrangements to that end. I accept that that is very important.
I also agree with the right hon. Gentleman in what he has said about the value of these Committees as an extension of this House and their impact on the efficiency of government, and indeed their value in questioning what goes on inside the various Government Departments concerned. I know of no reason why these investigations should not add to the efficiency of government, as he says, and I very much hope that they do so.
I should like to turn to the points made by the hon. Members for West Lothian (Mr. Dalyell) and for Motherwell (Mr. Lawson) about the impact of the last Committee on Scottish Affairs. I had an opportunity of talking to the Chairman, Mr. Tom Steele, who was our colleague in this House, as I wished to hear from him at first hand how he felt this Committee had worked. I value very much what he told me. I heard from him, and indeed from others—I say this perfectly fairly, I hope—how much the hon. Member for Motherwell had contributed to the impact of the last Committee. I therefore welcome very much what he said about its work.
The hon. Member for West Lothian has questioned the value of the impact of this Committee and he went on to say that the fact that the matter was not debated in this House might in some way have detracted from its value. When we had the debate on the Green Paper on Select Committees there were those who said that there were some reports which needed debate in this House to implement their value; there were others that did not. I think this is a fair view. I was interested to find, when I discussed the work of this Committee with certain people in academic circles outside the House, that they placed considerable value on the work of this Committee, and I was very impressed by this point of view. I accept, of course, that the more we are able to debate these reports in the House the better. Nevertheless I was very impressed to find that this Committee had had an impact, and I am not altogether sure that a debate in this House would necessarily have added to the impact that it had.

Mr. Lawson: It was debated.

Mr. Whitelaw: It was indeed debated; but in any case it certainly had a considerable impact outside the House.
The hon. Member for West Lothian raised the question of television. This is a subject of which anyone in my position is wise to take a very careful view. The proposition was made in the last Parliament. I was one of those who favoured televising the proceedings of the House. I have in no sense retracted from the view which I then took, but I think that this is something for the House as a whole to decide, and a question to be carefully considered before we come to a final decision. If I were to stress my own view, it is that I think that there is considerable advantage in considering whether the televising of the proceedings of Select Committees would be valuable. Personally, I think that it might well be, but I think that this also is a matter for the House as a whole to decide.
The hon. Member for Renfrew, West (Mr. Buchan) questioned the composition of the Select Committee and sought to speak for those who are not present tonight. It is not for me to say what their views are on the matter. In the last Parliament, the composition of the Committee was: nine members from the Government side, five members from the Conservative Opposition, one Liberal, and one Scottish Nationalist.
It is an inevitable feature of the setting up of these Select Committees that all Governments, by precedent, preserve the Government majority. Therefore, if places are to be found for other Members in opposition besides the main party, it is for the main party to surrender places for that purpose. This was done in the last Parliament. I fully recognise the position now, and I should not for a moment suggest that the party opposite should surrender its places to the other Members who might take part in this Committee. The situation is rather different now from what it was. In the last Parliament, I was the Opposition Chief Whip, and I decided to surrender places. I am not asking that anyone should do so now. I am merely pointing out what the facts were then and what the facts are today.
I have done my best to give notice to he hon. Member for Western Isles (Mr. Donald Stewart), who raised the problem with me last Thursday, that this debate would take place tonight, and, although he is not here, I hope that he will appreciate that, at least, he has given


every opportunity to be here to express the view which he put to me last Thursday.
I think that this is the best way of setting up the Committee. I realise that there are always difficulties in these matters. The hon. Member for Western Isles made representations to me. In answer to the hon. Member for Renfrew, West, I can only say that the three hon. Members from the Liberal Party in Scotland have not made similar represenations. I feel, therefore, that the composition of the Committee is, on the whole, reasonable.
I am grateful for what hon. Members have said about the work of the Committee. I agree with the right hon. Member for Kilmarnock about the width of the remit, and I think that this is wise. I hope that the Committee will have considerable success and will be valuable to the House. I am grateful for what has been said, and, if it is felt that I have been somewhat late in setting up the Committee, I can only reply in the well known phrase, "Better late than never". I am grateful to the House for its support.

Question put and agreed to.

Ordered,
That a Select Committee be appointed to consider Scottish Affairs:
That Mr. W. H. K. Baker, Mr. John Brewis, Mr. Dick Douglas, Sir John Gilmour, Mr. Hamish Gray, Mr. Robert Hughes, Mr. George Lawson, Mr. Ian MacArthur, Lieutenant-Colonel Colin Mitchell, Mr. James Sillars, Mr. John Smith, Mr. Iain Sproat, Dr. Gavin Strang and Mr. Patrick Wolrige-Gordon be Members of the Committee:
That the Committee have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place and to admit strangers during the examination of witnesses unless they otherwise order; to report from time to time, and to report Minutes of Evidence from time to time:
That six be the Quorum:
That the Committee have power to appoint persons with expert knowledge for the purpose of particular inquiries, either to supply information which is not readily available or to elucidate matters of complexity within the Committee's order of reference:
That the Committee have power to appoint two Sub-Committees each consisting of not more than eight Members and to refer to such Sub-Committees any of the matters referred to the Committee:

That every such Sub-Committee have power to send for persons, papers and records; to sit notwithstanding any adjournment of the House; to adjourn from place to place; to report to the Committee from time to time; and to admit strangers during the examination of witnesses unless they otherwise order:
That the Committee have power to report from time to time the Minutes of Evidence taken before such Sub-Committees and reported by them to the Committee:
That Three be the Quorum of every such Sub-Committee.

Orders of the Day — INCOME TAX (MR. A. W. FARROW)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. More.]

10.18 p.m.

Mr. David Stoddart: The subject of this debate as it appears on the Order Paper is the tax affairs of my constituent Mr. Farrow and the report of the Parliamentary Commissioner thereon, but I say at the outset that the implications of this case go rather wider than my constituent's affairs.
On 13th February, 1970, Mr. Farrow was shocked to receive a notice from Her Majesty's inspector of taxes telling him that he owed £194 18s. 9d., this sum including an amount of about £89 brought forward from 1967–68. Mr. Farrow was then 67, and the shock of receiving the news made both him and his wife very ill. On 20th February he wrote to the Inspector of Taxes pointing out that he had given the Inland Revenue Department all relevant information about his tax affairs, and that the arrears must be the Department's fault. Receiving no response, he wrote to the People free advice service. That newspaper assisted him as far as it could, and ultimately, quite correctly, advised him to take the matter to his Member of Parliament.
This the Farrows did, and my immediate predecessor took the matter up with the Treasury Ministers. As a result, the Farrows received a reply, but it was quite unsatisfactory. At this point the case was referred to me. After reading the details, I felt that something had gone seriously wrong in the tax office with the affairs of Mr. Farrow, but that it was fair that Treasury Ministers should be given another opportunity to take action. Accordingly, I wrote to the Financial Secretary


to the Treasury on 21st July, 1970, saying that I felt that the letter sent to Mr. Farrow on 2nd July was unhelpful, and asking the hon. Gentleman to reconsider the case with a view to waiving all or part of the arrears. On 5th August, I received a reply from the Minister of State, Treasury, saying that the waiving or reducing of the tax arrears could not be justified, but that their collection would be spread over four years.
Since I was not satisfied with that reply, I referred the matter to the Parliamentary Commissioner on 24th August, after obtaining a signed statement from Mr. Farrow. I later heard from the Financial Secretary that he, too, was rather perturbed about the case, and had discussed it with senior Treasury officials. I received the report of the Parliamentary Commissioner on 22nd April. However, in the meantime the Farrows had received a further demand from the Inland Revenue Department for a further £26 for underpayment of tax in 1969–70, making total arrears of £220. This meant that at £1 a week over four years Mr. Farrow would be 72 before the arrears finished being paid off.
After dealing with the background of the case, the Parliamentary Commissioner came to the conclusion in his report that Mr. Farrow's income tax affairs had been badly mishandled by the Inland Revenue Department, and that the complaint was fully justified. The report is long, and I cannot quote from it at great length. It said:
In addition to making a number of errors affecting Mr. Farrow's P.A.Y.E. codings and leading to underdeductions of tax, the tax offices concerned did not follow departmental standing instructions when they reviewed his case after each of the tax years 1967/68 and 1968/69. These instructions require an Inspector, in circumstances such as those of this case, to write to the taxpayer before taking any steps to raise an assessment…
and to explain certain things to him.
On receipt of a reply the Inspector is then required to consider whether payment of the arrears would involve serious hardship and, if satisfied that this is so, he should take no further steps to recover the underpayment. In Mr. Farrow's case no explanatory letter whatever was issued in connection with the 1967/68 underpayment, and when Mr. Farrow complained of the way his affairs had been dealt with the Inspector decided not to reply, on the grounds that (as he noted on the file) 'It will only stir up more trouble than it is worth.'
We certainly have bureaucrats in this country, but at least they are honest

bureaucrats when they record something like that on an income tax file.
In the case of the 1968–69 liability, the inspector sent a letter to Mr. Farrow, but it did not give an adequate explanation of the cause of the under-payment, as distinct from how it was calculated. The Parliamentary Commissioner finds that Mr. and Mrs. Farrow—he includes her because, although she is not legally liable for any part of the under-payment, she is closely affected and has been considerably distressed by this matter—have suffered an injustice as a result of maladministration by the Inland Revenue.
He says:
By way of remedying this, the Department have expressed their apologies for the manner in which they have dealt with Mr. Farrow's affairs, but have told me that they did not think they would be justified in the light of his present circumstances in waiving collection of any of the arrears.
In his conclusion, the Parliamentary Commissioner says:
I have considered whether the Department's proposals as stated above can constitute an adequate remedy for the consequences of their maladministration. I am not satisfied that they do. I have no reason to doubt Mr. and Mrs. Farrow's statement about the effect on their health of the worry caused by the Department's actions or Mr. Farrow's statement that, at his age, he would by now have considered giving up his part-time job, but for the additional amount he has to pay. In its First Report for the Session 1970–71, the Select Committee on the Parliamentary Commissioner for Administration expressed the view that it would be appropriate for the Inland Revenue to review their practice for remedying cases where, owing to departmental error, the taxpayer has sustained injustice; and to consider providing a financial remedy on an ex-gratia or compensatory basis in those cases where an extra-statutory concession is not considered appropriate, without sole regard to the degree of hardship caused to the taxpayer. In my view, this case should be considered on this basis.
After receiving the report, I also received a letter from the Financial Secretary. I sought an interview with him, but I think that it is true to say that we got no further forward at that interview. Since I was not satisfied with that, I decided that this sad and sorry case should be taken as far as I could take it possibly, and I therefore applied for this Adjournment debate. I feel that the House will agree that this case has shown up serious defects in the Inland Revenue Department and has highlighted injustice that occurs to individuals every day.
Indeed, judging by correspondence I have received, as a result of the publicity which has surrounded this case, from many parts of the country, the Farrow case represents the tip of an ugly and treacherous iceberg upon which unsuspecting taxpayers can quickly founder. I will quote one or two cases which have come to my notice, because they are important.
The first concerns an 83-year-old man living in Brough, Yorkshire, who is in hospital. He is still being pursued by the tax authorities for arrears which were no fault of his. This is worrying him stiff, and his family, too. Another case concerns a retired civil servant living in Somerset. He is 86 years old and has an ailing wife of 85, and he owes £107 to the Inland Revenue Department, which is pursuing him for that amount. Then there is the case of a man of 69 living in Romsey, who has had to find a job and borrow money because of arrears and the refusal of the tax authorities to extend the period of payment. These are heartrending cases and the public at large and hon. Members will feel the utmost sympathy for the people concerned.
Nobody, least of all myself, underestimates the difficulties faced by tax officials throughout the country. It is not being suggested that the cruel heartless treatment of the Farrows and others like them stems from some sadistic desire on the part of tax officials to cause the maximum pain to the taxpayer. It is rather the system which is cruel and heartless, and the complexity of our tax laws, coupled with the extreme shortage of staff of the Inland Revenue Department, causes a situation in which mistakes are made and perpetuated.
Clearly, the system has to be modified to take account of the serious situation which has been revealed not only by Mr. Farrow's case and others which have come to light but by the Report of the Select Committee on the Parliamentary Commissioner for Administration.
I believe that the recommendation contained in House of Commons Paper 240 is reasonable. I have no time to quote it. I should have thought that this was the least that Treasury Ministers could do. Indeed, I fail to understand why Treasury Ministers have not done something about the matter to date. For myself, I believe

that the present rules for hardship are far too restrictive and, so far as I can gather, they can be applied only to those virtually on the bread line. Certainly the rules ought to be more widely drawn to give the tax authorities more scope for assisting taxpayers in difficulties and not necessarily only when the tax authorities have been at fault. Surely it must be right to allow the Inland Revenue Department to make ex-gratia or compensatory payments without sole regard to the degree of hardship where the tax authorities have made serious errors as they have in the case of Mr. Farrow.
If justice is to be done and seen to be done, these measures must not only be adopted in future but must be made retrospective for a reasonable time in order that those like my constituents who are existing sufferers may be beneficiaries. Although there are many cases like the Farrow case, the cost to the Treasury would be relatively small. As the Select Committee noted in paragraph 31 of its Report, only some £82,000 was remitted by the Inland Revenue Department for the year 1969–70 out of a total of £5,000 million collected in taxes.
Treasury Ministers should act quickly. I and other hon. Members will be satisfied only if in his reply tonight the Financial Secretary announces that he intends to come forward shortly with the necessary measures, including retrospection, to remedy what is a disgraceful and cruel situation.

10.33 p.m.

The Financial Secretary to the Treasury (Mr. Patrick Jenkin): I should like to express my appreciation of the moderate and reasonable way in which the hon. Member for Swindon (Mr. David Stoddart) has dealt with what he rightly described as a sad and sorry case affecting his constituent. This is a case in which, fortunately, we have the advantage that all the facts are set out in a clear and undisputed form in the Report of the Parliamentary Commissioner for Administration.
I say at once that I am certainly not here tonight to dispute the finding that Mr. Farrow's tax affairs were badly mishandled by the Inland Revenue over a period of years. Mr. Farrow all along gave prompt and accurate returns of his income, both of his pensions and his part-time earnings, and the various tax offices


which should have ensured that proper codings were made failed to do so, so that over a period of two years much too little tax was deducted. Added to these errors, there was the failure to give him an adequate explanation of how the arrears arose and, subsequently, in the instance described by the hon. Member, to reply to one of Mr. Farrow's letters.
All this is fully conceded, and in once again tendering the apologies of Treasury ministers and the Inland Revenue I would emphasise that this case must not be regarded as in any way typical of the standard of work in the Inland Revenue as a whole or in the Swindon office in particular. The hon. Member said that he thought that this was the tip of an ugly and treacherous iceberg. Of course, mistakes occur from time to time affecting taxpayers of limited means. It would be quite wrong to deduce from that that unfortunate episodes of this sort are widespread. They do happen, but they are very much the exception.
Some of the Press comment to which this case has given rise in recent days has had very harsh things indeed to say about the Inland Revenue officials, happily not echoed by the hon. Member tonight. This is ironic because Mr. Farrow, as I am sure the hon. Member knows, was at one time working as a temporary clerk in the Swindon office. He must know some of the difficulties there. We should all remember that the staff in the Inland Revenue are in one sense the agents of this House, collecting from people the taxation which enables the policies demanded and approved by this House to be implemented.
We have in the past saddled them with an over-complicated system and in recent years this has, as the hon. Member recognised, strained the Department's resources to the limit. In these circumstances mistakes, even bad mistakes, are inevitable but it is quite wrong and unfair, as some have sought to do, to condemn the whole service on that account. Nevertheless, as I have conceded, this was a bad case and the real question is that raised by the hon. Member at the end of his speech—whether and in what circumstances, after mistakes of this nature have come to light, the Inland Revenue should waive the underpaid tax or otherwise relieve the taxpayer of the full obligation which in law undoubtedly lies upon him.
As the House knows, the Taxes Acts make express provision to allow both the Inland Revenue and the taxpayers to go back six years to correct mistakes which may subsequently have come to light. In the case of the Inland Revenue if a mistake comes to light it has a legal duty to do this. There would be no point whatever, the House having conferred this power and imposed this duty, if the tax were not then to toe recoverable.
The issue here is whether, in all the circumstances, it is right to enforce payment of the arrears. The Parliamentary Commissioner has, in effect, urged that the Inland Revenue should waive part or all of the arrears, and it would be utterly wrong for Treasury Ministers to treat lightly a recommendation of that sort. As the hon. Member has acknowledged, at the time that he put the matter to the Parliamentary Commissioner I said that the case was one which was giving me cause for some concern.
Yet in replying to the hon. Member I must make it clear that the decision of the Inland Revenue not to waive any part of the arrears in this case was fully in accord with its practice as it has stood over recent years. On the test of hardship which is set out in the Select Committee's Report to which the hon. Member referred, which has been applied in such circumstances, Mr. Farrow did not qualify for relief. His income and means were above the level which would entitle him to claim to have his tax waived. It would be quite wrong for the Inland Revenue to make a special exception in one case simply because the case has been pursued, as this one has been, with energy and vigour.
To be fair to the hon. Gentleman, he has not sought special treatment for his constituent. The case made is that if this is the result of the existing practice it is high time the practice was changed. The hon. Gentleman is in good company in urging that, for earlier this year the Select Committee on the Parliamentary Commissioner for Administration recommended precisely in this sense. The hon. Member has already read the relevant part of the Committee's Report and I need not therefore repeat it. The Committee made its recommendation because in a number of cases which were drawn to its attention no relief had been offered as the Inland Revenue did not consider


that the circumstances amounted to hardship.
The core of the proposal put forward by the Select Committee is that a remedy should be considered
without sole regard to hardship".
This is an important recommendation with some very far-reaching implications. I regret that I can do no more than tell the House that the Select Committee's Report is at present under active consideration by the Government. I am not yet in a position to say what the Government's decision will be, although I can indicate—and perhaps this will be some comfort to the hon. Gentleman—that the Chancellor of the Exchequer hopes to table the Government's comments on the Select Committee's Report fairly soon.
The hon. Gentleman specifically asked me whether any recommendation would have retrospective effect. I can give no indication about that. The House must await my right hon. Friend's comments on the Report.
In the meantime—and I fully realise that this will be a very severe disappointment to Mr. and Mrs. Farrow—there is no alternative open to the Inland Revenue

but to continue to operate on its present rules which have been in force for some time. Mr. Farrow's means are such that if the payment of the arrears of tax is spread over the four years mentioned by the hon. Gentleman the extra liability will not involve him in that degree of hardship which, according to current practice, would be necessary to allow the Revenue to remit any of the tax due. If Mr. Farrow's circumstances change—for instance, if he gives up work—the Revenue will of course reconsider the position.
I can assure the hon. Gentleman that Mr. and Mrs. Farrow's position has been looked at very carefully, but their resources are such that they do not, as things stand today, come within the hardship category. Any right-minded person will feel a lot of sympathy for the Farrows who find themselves saddled late in life with an unexpected and unwelcome burden. The hon. Member has pursued their case with tenacity, and it is with real regret that I cannot offer either him or his constituents more tangible comfort.

Question put and agreed to.

Adjourned accordingly at seventeen minutes to Eleven o'clock.